3.7.2 Balance sheet + income statement

What do balance sheets show?

• A firm's income over a period of time

• A firm's expenses over a period of time

• A snapshot of a firm's finances at a fixed point in time

• A firm's profit and loss over a period of time

Which of the following is considered a non-current asset?

• Cash in the bank

• Receivables (debtors)

• Vehicles

• Overdraft

What are current liabilities?

• Debts that need to be paid off within a year

• Debts that the business will pay off over several years

• Assets that will generate revenue in the future

• Assets that the business is likely to keep for more than a year

What does the term 'bad debts' refer to?

• Debts that are paid on time

• Debts that debtors won't ever pay

• Debts that are paid within a year

• Debts that are paid by the business

What is included in the total current assets on a balance sheet?

• Premises

• Share capital

• Cash in the bank

• Non-current liabilities

What is the purpose of depreciation on a balance sheet?

• To show the value of all the business's non-current assets

• To provide a financial benefit to the business

• To give a realistic value of their non-current assets

• To show the total current assets value

What are receivables (debtors)?

• Money owed to the business

• Money the business owes

• Non-current assets

• Current liabilities

What does the term 'net assets' refer to on a balance sheet?

• Total current assets minus total current liabilities

• Total non-current assets minus total non-current liabilities

• Total assets minus total liabilities

• Total equity minus total liabilities

What is the significance of brackets on a balance sheet?

• They indicate a positive number

• They indicate a negative number

• They indicate a non-current asset

• They indicate a current liability

What is the difference between current and non-current assets?

• Current assets are likely to be kept for more than a year, non-current assets are not

• Current assets are likely to be kept for less than a year, non-current assets are likely to be kept for more than a year

• Current assets are always cash, non-current assets are always property

• Current assets are always liabilities, non-current assets are always equity