Financial Statements - 2

Which of the following is included under current liabilities in a statement of financial position?

• Inventory

• Loan repayable in 10 years

• Trade payables

• Premises

Which of the following would appear under non-current assets?

• Bank overdraft

• Fixtures and fittings

• Cash in hand

• Trade receivables

A business has total assets worth $120,000 and liabilities of $45,000. What is the owner’s equity?

• $75,000

• $45,000

• $165,000

• $120,000

What is the purpose of a statement of financial position?

• To calculate profit or loss for the year

• To show the financial position of a business at a specific point in time

• To determine cash inflows and outflows during the year

• To track daily expenses and incomes

Which of the following is an example of a current asset?

• Bank loan repayable in 3 years

• Trade receivables

• Goodwill

• Motor vehicles

A business’s equity is $85,000, and its liabilities are $40,000. What are its total assets?

• $45,000

• $125,000

• $85,000

• $40,000

Which of the following best defines assets?

• Obligations owed by a business to outsiders.

• Resources owned by a business.

• The residual interest in the assets of the business after deducting liabilities.

• Amounts payable to suppliers for goods purchased on credit.

Capital represents:

• The total value of current liabilities.

• The ownership interest in the business.

• Resources owned by the business.

• Amounts owed to trade payables.

What are current assets?

• Assets purchased for long-term use in the business.

• Assets that have no physical presence, like goodwill.

• Assets that cannot be sold.

• Assets that are expected to be converted into cash or used up within a year.

Following is an example of intangible asset.

• Cash

• Land

• Goodwill

• Trade Payable