Balance Sheet

Question 1

What is a balance sheet?

Answer 1

• Snapshot of companies financial position at given point in time
• Reports companies assets, liabilities and ownership equity

Question 2

What is meant by assets and liabilities?

Answer 2

A - Van or land which is owned
L - A loan or debt

Question 3

What is a current asset?

Answer 3

Cash and other assets that are expected to be converted to cash within a year

Question 4

What is a fixed asset?

Answer 4

Assets purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings and equipment

Question 5

What is difference between debtors and creditors?

Answer 5

• Creditors - individual or business that has lent funds to a business and is owed money
• Debtor - individual or business who has borrowed funds from a business and so owes it money