3.4 Review

These are the debts owed by a business, which are expected to take longer than a year from the balance sheet date to repay.

• Noncurrent Assets

• Share Capital

• Current Liabilities

• Noncurrent Liabilities

Reorder the following items as they would appear on a balance sheet:

• Noncurrent Liabilities "Long-term loans"

• Current Liabilities

• Equity

• Noncurrent or "Fixed" Assets

• Current Assets

The following is a selection of data from "Melissa & Doug's" toy company's Profit & Loss Account.

Profit for period: $135,000

Dividends: $15,000

Retained Profit: X

Solve for X:

Mathematical Equivalence

ON

​ (a)   are items of monetary value that are owned by a business, such as ​ ​ (b)   , stocks and machinery.

• Assets
• Liabilities
• Cash
• Creditors
• Equity
• Profit
• Long-term loans

Organize these options into the right categories or the sections of the Balance Sheet where they would appear

Groups:

(a) Assets

,

(b) Liabilities

,

(c) Equity

• Overdrafts

• Debtors

• Patents & trademarks

• Stock

• Creditors

• Share Capital

• Real Estate & Offices

• Cash

• Accumulated Depreciation

• Short-term loans

• Accumulated Retained Earnings

• Long-term Loans

Reorder the following items as how they would appear on the Profit & Loss account

• Expenses

• Sales Revenue

• Profit before Interest & Tax

• Cost of Goods Sold

• Gross Profit

Choose any of the following items that would be considered as current assets on the Balance Sheet.

• Cash

• Debtors

• Creditors

• Overdrafts

• Stock

Choose any of the following items that would be considered "Noncurrent" or "Fixed" assets on the Balance Sheet.

• Patents

• Goodwill

• Machinery

• Stock (Inventory)

• Mortgage loans

Answer explanation

Noncurrent assets are items owned by the firm that are not intended for resale within the next 12 months, they provide value to the firm and/or help to generate sales.

Goodwill is an "Intangible Asset" that exists hen the value of the firm exceeds its "book" value due to the brand image and/or reputation.

Reorder the following items according to how they would appear on a Balance Sheet

• Total Noncurrent Assets

• Total Assets

• Current Assets

• Noncurrent Assets

• Accumulated Depreciation

The three main sections (in order) of the Balance Sheet are assets, liabilities, and _.