The Purpose of Financial Statments

Pregunta	Respuesta
Statement of financial position helps users.	assess the financial health of an entity It is particularly helpful in determining the state of the entity's liquidity risk and financial risk.
Assets.	An asset is something that an entity owns or controls in order to derive economic benefits from its use.
Non-current Asset.	An asset which will deliver economic benefits to the entity over the long term is classified as non-current.
Current Asset.	assets that aren't expected to last for any longer than one year from the reporting date are classified as current assets.
Liabilities.	A liability is an obligation that a business owes to someone and its settlement involves the transfer of cash or other resources.
Non-current Liability.	A liability which will be settled over the long term is classified as non-current.
Current Liability.	liabilities that are expected to be settled within one year from the reporting date are classified as current liabilities.
Equity.	Equity is what the business owes to its owners.
Finding the Equity.	Equity is derived by deducting total liabilities from the total assets.
Equity Represents.	The residual interest in the business that belongs to the owners.

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