Balance Sheet
Balance Sheet (also called Statement of Financial Position) consists of three things:
1 ASSET : Total valuable things that company owned
2 LIABILITY : Money borrowed from debtors
3 EQUITY: Money received from shareholders and previous years earnings
The relationship between these three things are:
ASSET= LIABILITY+ EQUITY
*A company use the money borrowed from creditors (LIABILITY) and money
1 ASSET : Total valuable things that company owned
2 LIABILITY : Money borrowed from debtors
3 EQUITY: Money received from shareholders and previous years earnings
The relationship between these three things are:
ASSET= LIABILITY+ EQUITY
*A company use the money borrowed from creditors (LIABILITY) and money
received from shareholders and previous years earnings(EQUITY) to buy
valuable things (ASSET)
ASSET can be further divided into 2 parts:
1 NON-CURRENT ASSET : Asset that can not be turned into money
ASSET can be further divided into 2 parts:
1 NON-CURRENT ASSET : Asset that can not be turned into money
within one year
2 CURRENT ASSET : Asset that can be turned into money within one year
2 CURRENT ASSET : Asset that can be turned into money within one year
LIABILITY can be further divided into 2 parts:
1 NON-CURRENT LIABILITY : Liability that must be paid off to debtors in
more than one year
2 CURRENT LIABILITY : Liability that must be paid off to debtors within
2 CURRENT LIABILITY : Liability that must be paid off to debtors within
one year.
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