What I may already know: • The statement of financial position is the third stage of the final accounts. • What assets and liabilities are for a business.
Learning Intentions
In this chapter, I will learn: • Why a business prepares a statement of financial position. • How to prepare a statement of financial position. • How to prepare the final accounts.
Key Words:
Statement of financial position Current assets Current liabilities Financed by Working capital
Total net assets Authorised share capital Capital employed Issued share capital Adjustments
WHY DOES A BUSINESS PREPARE A STATEMENT OF FINANCIAL POSITION?
The statement of financial position is the last step in preparing the final accounts. It is a list of a business’s assets, liabilities and capital on a particular date (e.g. 31/12/16).
