You should be able to prepare a balance sheet and explain how a business can use this information.
Assets - these are the posessions of a business
Liabiliites - these are what the busienss owes
Capital - this is what the owner invests in the busienss eg Owners fund
In a nutshell the balance sheet consists of:
- FIXED and CURRENT ASSETS
- LONG TERM AND CURRENT LIABILITIES
- OWNERS FUND
Learning the key terms
Completing the work pack
Worksheet - Components of a financial statement - click here
Once this is secure we can move on the RATIO ANALYSIS and our FINANCE knowledge should be secure. If your still not sure on either Profit and Loss or balance sheets perhaps this could be re-visited at your weekly mentoring / coaching slot with your business studies mentor.
Revise key terms for Profit and loss and balance sheets - for acess to the KEY TERM TEST click here. The test will be next lesson!
Good luck and enjoy