Financial Accounting 1

Assets

economic resources which can generate future economic benefits that are controlled by the business as a result of a past event

Non-current Assets

(continuous benefits over a number of years, or single benefit in future >12 months)

• Property, plant and equipment

• Intangible assets

• Long term financial assets

• Long Term Investments

Current Assets

(receive benefit within 12 months)

• Inventory

• Bank and Cash

• Receivables (people/orgs who owe the entity money)

Equity

Equity = Assets - Liabilities (Accounting equation)

• Residual interest in assets after settling all liabilities

• AKA: Net Worth, Capital

Liabilities

present obligation, as result of a past event, which will require an outflow of economic benefit to settle

Non-current liabilities

(settlement will happen >12 months)

• Loan

Current liabilities

(short term, settled within 12 months)

• Payables (people owned money by the organisation)

• Bank Overdrafts

• Taxes

• Accrued Expenses