Flashcards
The Purpose of Financial Statments
Cards in this deck (10)
- 1Statement of financial position helps users.assess the financial health of an entity It is particularly helpful in determining the state of the entity's liquidity risk and financial risk.
- 2Assets.An asset is something that an entity owns or controls in order to derive economic benefits from its use.
- 3Non-current Asset.An asset which will deliver economic benefits to the entity over the long term is classified as non-current.
- 4Current Asset.assets that aren't expected to last for any longer than one year from the reporting date are classified as current assets.
- 5Liabilities.A liability is an obligation that a business owes to someone and its settlement involves the transfer of cash or other resources.
- 6Non-current Liability.A liability which will be settled over the long term is classified as non-current.
- 7Current Liability.liabilities that are expected to be settled within one year from the reporting date are classified as current liabilities.
- 8Equity.Equity is what the business owes to its owners.
- 9Finding the Equity.Equity is derived by deducting total liabilities from the total assets.
- 10Equity Represents.The residual interest in the business that belongs to the owners.
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- The purpose of a financial statements and its elements
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- scott-astin1
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