Components of a statement of financial position:

• Assets are resources owned by the business that have monetary value
• Match the non-current asset type with its example:

  Property ↔️ Land used for a factory

  Plant and Equipment ↔️ Manufacturing machinery

  Intangible Assets ↔️ Patents
• Current assets are expected to be converted into cash within one year.

  True
• Current assets provide the necessary liquidity for a business to meet its short-term obligations
• Current assets are resources owned by the business that are expected to be converted into cash or used up within one year
• Match the non-current liability type with its example:

  Long-term Loans ↔️ Bank loans

  Lease Liabilities ↔️ Leasing equipment

  Deferred Tax Liabilities ↔️ Differences between accounting and tax methods
• What is an example of a short-term loan that must be repaid within one year?

  Bank overdraft
• The Statement of Financial Position allows stakeholders to assess a business's financial health at a specific point in time.

  True
• Match the current asset type with its example:

  Cash and Cash Equivalents ↔️ Bank deposits

  Inventory ↔️ Raw materials

  Accounts Receivable ↔️ Invoices issued to customers
• Non-current assets are intended to be sold during the business's normal operating cycle.

  False
• Current assets are crucial for maintaining a business's financial flexibility.

  True
• Current liabilities are debts that a business is expected to pay off within one year
• What are current liabilities expected to be paid off within?

  One year
• Managing current liabilities is crucial for maintaining financial flexibility.


  True
• What is another name for the Statement of Financial Position?

  Balance Sheet
• What is the defining characteristic of non-current assets?

  Benefits exceed one year
• What is the primary purpose of non-current liabilities?

  Fund major investments
• What does equity represent in a business?

  Ownership stake
• What does a higher current ratio suggest about a business?

  Better short-term liquidity
• What is another name for the Statement of Financial Position?

  Balance Sheet
• How long are non-current assets expected to provide benefits to a business?

  More than one year
• Non-current assets are crucial for a business's long-term growth and profitability
• Arrange the following current assets in order of liquidity (most liquid to least liquid):

  1️⃣ Cash and Cash Equivalents

  2️⃣ Accounts Receivable

  3️⃣ Inventory
• Match the non-current asset type with its example:

  Property ↔️ Office buildings

  Plant and Equipment ↔️ Delivery trucks

  Intangible Assets ↔️ Trademarks
• How long are non-current liabilities expected to be paid off by a business?

  More than one year
• Accounts payable represents money owed to suppliers for goods or services received.

  True
• Money owed to suppliers for goods or services received is called accounts payable
• Match the type of current liability with its definition:

  Accounts Payable ↔️ Money owed to suppliers

  Accrued Expenses ↔️ Expenses incurred but unpaid

  Short-term Loans ↔️ Borrowed amounts repaid within one year
• Resources owned by the business with monetary value are called assets
• Non-physical resources with monetary value are called intangible assets
• Borrowed money repaid over more than one year is called a long-term loan
• Money invested by shareholders is called share capital
• How do current liabilities differ from non-current liabilities?

  Repayment time frame
• The Statement of Financial Position provides insights into a company's financial health.


  True
• Match the type of current asset with its definition:

  Cash and Cash Equivalents ↔️ Cash on hand and in the bank

  Inventory ↔️ Raw materials, work-in-progress, and finished goods

  Accounts Receivable ↔️ Money owed to the business by customers
• Non-current liabilities support non-current assets.


  True
• Order the following ratios based on their purpose in interpreting the Statement of Financial Position:

  1️⃣ Current Ratio: Measures short-term liquidity

  2️⃣ Gearing Ratio: Shows funding by debt versus equity

  3️⃣ Equity Ratio: Measures assets funded by equity
• A higher gearing ratio indicates higher financial risk