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100
How often is a balance sheet drawn up?
A balance sheet is drawn up at the end of the accounting period.
100
Give 2 examples of long term liabilities.
Debentures, Loans, Mortgages.
100
Define assets.
Assets are economic resources owned by a business that are used in its daily operations to generate profit and benefit the business.
100
Define Fixed Assets.
Fixed Assets are assets that are to be used by the business for a long period of time.
100
Who draws up a balance sheet?
An Accountant
200
What are liabilities?
Money or things that the business owes for.
200
Describe Nominal Accounts.
Nominal accounts are those in which expenses and income are recorded: for example, sales, purchases, wages, electricity, commission received.
200
Explain the purpose of the balance sheet.
The balance sheet is a financial statement that shows the financial position of a company at a specific point in time. It provides a snapshot of the company’s assets (what the business owns), liabilities (what the business owes), and capital/equity.
200
Which one of these would be considered as an asset on a balance sheet?
a) Unpaid debts owed by the company
b) The amount of money in a company's bank account
c) Money someone has invested
b) The amount of money in a company's bank account
200
Describe the difference between personal accounts and impersonal accounts.
Personal accounts are accounts related to people, companies, or owners while impersonal accounts deal with things like assets, expenses, or capital.
300
A business takes out a $10,000 bank loan to purchase machinery. How will this be shown on the balance sheet?
- Assets: Machinery increases by $10,000.
- Liabilities: Loan increases by $10,000.
300
What is the Accounting Equation?
Accounting equation is referred to as the relationship between assets, liabilities and capital of a business.
300
How many sections are there in a balance sheet?
5
300
What are the main components needed in the title of a balance sheet?
Name.
Statement of Financial Position as at (Date)
300
What are the major components of a balance sheet?
Assets, Liabilities, and Capital
400
Differentiate between nominal accounts and real accounts.
Nominal accounts deal with expenses, revenues, income, and losses. Real accounts are accounts that deal with assets and liabilities.
400
Compare current and noncurrent assets and give one example of each.
Current assets are assets than can be converted to cash easily or will be consumed within a year, and non current (fixed) assets are assets that are to be used by the business for a long period of time.
Current- Accounts receivables
Non-Current- Land
400
Explain the difference between accounts receivable and accounts payable.
Accounts receivable are amounts owed to the business by customers (debtors), while accounts payable are amounts the business owes to suppliers (creditors).
400
How does the accounting equation help a business to determine their financial position?
A balance sheet helps a company to determine their financial position by showing what and how much the company owns, how much it owes, and its equity.
400
How does the balance sheet help a company to determine their financial position?
A balance sheet helps a company to determine their financial position by showing what and how much the company owns, how much it owes, and its equity.
500
Identify the assets and liabilities and calculate the capital using the formula to find capital:
Machinery: $30,000
Cash in Hand: $5,000
Office Supplies: $2,000
Loan: $10,000
Accounts Payable; $3,500
Loan from Angel Can: $700
Assets= Machinery, Cash in Hand, Office Supplies
Liabilities= Loan from Bank, Accounts Payable, Loan from Angel Can
(Asset- Liabilities)
[30,000+5,000+2,000] 37,000 - [10,000+3,500+700] 14,200= 22,800
500
If a business' assets are $200,000 and its liabilities are $130,000. What is its equity?
(Assets- Liabilities= Capital)
$200,000- $130,000= $70,000
500
Using the Accounting Equations, solve the following problems:
Capital (25,000) Assets (?) Liabilities (10,000)
Capital (50,000) Assets (75,000) Liabilities (?)
Capital (?) Assets (120,000) Liabilities (70,000)
Assets= Capital+ Liabilities (25,000+10,000= 35,000)
Liabilities= Assets- Capital ($75,000-$50,000= $20,000)
Capital= Assets- Liabilities ($120,000-$70,000=$50,000)
500
Looking at this Balance sheet, calculate all the missing (?) values.
500
Using the Accounting Equations, solve the following problems:
Capital (18,000) Assets (?) Liabilities (2,000)
Capital (5,000) Assets (30,000) Liabilities (?)
Capital (?) Assets (90,000) Liabilities (45,000)
Assets= Capital+ Liabilities (18,000+2,000= 20,000)
Liabilities= Assets- Capital ($30,000-$5,000= $25,000)
Capital= Assets- Liabilities ($90,000-$45,000=$45,000)