☆Financial Statements include:
- a statement of financial position at the end of the period
- a statement of comprehensive income for the period
- a statement of changes in equity for the period
- statement of cash flows for the period
- notes, comprising a summary of accounting policies and other explanatory notes
The statement of financial position:
Statement of Financial Position: showing the financial position of a business at a point of time.
The Vertical format of the SFP: (Statement of Financial Position as at 31 December 2007)
●The top half of the balance sheet shows the assets of the business.
●The bottom half of the balance sheet shows the capital and liabilities of the business.
A Statement of financial position at the end of the period (Balance Sheet):
W Xang
Balance Sheet as at December 31 20X6
Balance Sheet as at December 31 20X6
| $ | $ |
Non – current assets | | |
Motor Van | | 2,400 |
Current assets | | |
Inventory | 2,390 | |
Trade receivables | 1,840 | |
Cash at bank | 1,704 | |
Cash in hand | 56 | |
| | 5,990 |
Total assets | | 8,390 |
| | |
| $ | $ |
Capital account | | |
Balance at 1 January 20X6 | 4,200 | |
Add net profit for year | 3,450 | |
Increase in capital | 1,000 | |
| 8,650 | |
Less: Drawing for year | (2,960) | |
| | 5,690 |
| | |
Non – current liabilities | | 1,000 |
Current liabilities | | |
Payable | | 1,700 |
Total | | 8,390 |
The horizontal format of the SFP: (Statement of Financial Position as at 31 December 2007)
●The left half of the balance sheet shows the assets of the business.
●The right half of the balance sheet shows the capital and liabilities of the business.