Assets and liabilities
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Transcript of Assets and liabilities
Assets and LiabilitiesSection 2 Objective 8
Give examples of different types of
assets and liabilities
Assets and Liabilities• Balance sheet– This financial statement gives a view of a business
financial position at the end of its financial period– The view highlights the accounting equation (balance
sheet equation) relationship• Assets = Capital (Equity)+ Liabilities
– Details given in the balance sheet are• Assets• Liabilities • Capital (Equity)
Assets and Liabilities• Assets are resources owned by the business– Examples of assets include• Cash in hand (notes and coins)• Cash in bank• Equipment• Fixtures and fittings• Inventory (known as stock)• Land• Premises• Accounts receivables (known as debtors or trade receivables)• Vehicles
Assets and Liabilities
• Suppose you are considering opening a barber shop or beauty salon….–What assets
would you need to start your business???
Assets and Liabilities• Liabilities are the amounts owed by
the business to other individuals or firms– Examples of liabilities include• Bank loans• Bank overdraft• Accounts payable (known as
creditors and trade payables)• Mortgage loans• Expenses owing (amounts unpaid
for goods or services)
Assets and Liabilities
• Suppose you are considering opening a barber shop or beauty salon….–What liabilities would you
need to start your business???
Assets and Liabilities• Capital (known as Equity) represents the investment
made by the owner, partners or other individuals in his or her business
• It is considered as the net value (worth) of the business
Assets and Liabilities
• Remember:
Assets and Liabilities
• Analyse the pictures on the next few slides and indicate whether each of them are–Assets • or
– Liabilities
Assets and Liabilities
Assets and Liabilities
Assets and Liabilities
Assets and Liabilities