1. What is a statement of fi nancial position? . . 294 2. How is a statement of fi nancial position prepared? . . . . . . . . . . . . . . . . . . . 296
3. How is a complete set of fi nal accounts prepared? . . . . . . . . . . . . . . . . . . . 297 Chapter Review .
. . . . . . . Case Study Academy Motors
Academy Motors is a well-established garage selling new and used cars. It’s where the Foleys bought their new car. The Finance Manager of Academy Motors prepares a statement of fi nancial position at the end of each year. This document reveals the value of all the assets and liabilities of the business, as well as how the business is fi nanced. Along with the income statement, this is an important document for assessing the performance and wealth of the business.
. . . . . . . . . 300
Learning Outcomes 2.13
LO 2.13
1. What is a statement of fi nancial position?
A statement of fi nancial position shows the value of all the assets owned by the business and all the liabilities it owes other people on a particular date. It summarises the wealth of a business and is also commonly known as a balance sheet.
294
Use Record Book 2 to prepare a statement of fi nancial position.
