Deck 2: The Statement of Financial Position

Question 1

Daryl runs a small business which packages and sells household and industrial cleaning products.One of the items on the following list is an asset of his business.Which item is the business asset?

A)Bank overdraft
B)Amounts due to cleaning fluid supplier
C)Delivery vehicle
D)Capital

Answer 1

Delivery vehicle

Question 2

Darcy's business has two categories of non-current asset: machinery and motor cars.Capital is £117 060 at 30 April 20X4, current assets are £22 700, and long-term liabilities are £7000.There are no current liabilities.The machinery total is £76 760.What is the total for motor cars in Darcy's business balance sheet at 30 April 20X4?

A)Insufficient information provided
B)£56 000
C)£24 600
D)£101 360

Answer 2

£24 600

Question 3

Jürgen's business statement of financial position shows current assets of £37 000, current liabilities of £26 000 and capital of £102 000.There are no long-term liabilities.What is the total of non-current assets?

A)£102 000
B)£91 000
C)£65 000
D)£11 000

Answer 3

£91 000

Question 4

Xavier's business has long-term liabilities of £25 000 and current liabilities of £23 470 at 31 March 20X0.At the same date, the total of current assets less current liabilities is £13 220 Capital is £30 420. Which one of the following statements is correct?

A)Current assets are less than non-current assets by £11 780.
B)Non-current assets exceed current assets by £5510.
C)Current assets exceed long-term liabilities by £17 200.
D)Non-current assets exceed current assets by £28 980.

Question 5

Purdy's business has non-current assets of £81 000, current assets of £34 000 and current liabilities of £36 000.There are no long-term liabilities.Which one of the following statements is correct?

A)Total assets are £115 000
B)Capital and liabilities are £117 000
C)Capital is £45 000
D)Total assets are £151 000

Question 6

Smylie Bentham is the trading name used by Harry.The business has long-term liabilities of £100 000, non-current assets of £289 770, and current assets of £124 400.The total of current liabilities less current assets is £3340.What is the total of current liabilities?

A)£21 060
B)£27 740
C)£127 740
D)£121 060

Question 7

Smylie Bentham is the trading name used by Harry.The business has long-term liabilities of £100 000, non-current assets of £289 770 and current assets of £124 400.The total of current liabilities less current assets is £3340.What is the total for capital?

A)£286 430
B)£186 430
C)£193 110
D)£293 110

Question 8

Elliott's business has current liabilities of £9000, non-current assets of £36 000 and current assets of £12 000.There are no long-term liabilities.What is Elliott's capital?

A)£3000
B)£15 000
C)£39 000
D)£33 000

Question 9

Telfer Smith's statement of financial position at 31 December shows the following balances: There were no long-term liabilities.
What is the total of Telfer Smith's capital at 31 December?

A)£64 500
B)£120 500
C)£84 500
D)£140 500

Question 10

Simeon runs a business as a sole trader.One of the items on the following list is an asset of his business.Which item is the business asset?

A)Capital introduced
B)Amount owing to HMRC
C)Inventory of goods for resale
D)Loan from brother

Question 11

Evan's business has non-current assets of £62 000, current assets of £17 000, current liabilities of £10 000 and a long-term liability of £20 000.What is Evan's capital?

A)£69 000
B)£49 000
C)£7000
D)£30 000

Question 12

Which of the following correctly expresses the accounting equation?

A)Capital + Assets = Liabilities
B)Non-current assets - Current assets + Liabilities = Capital
C)Non-current assets - Current assets - Liabilities = Capital
D)Assets = Capital + Liabilities

Question 13

Victoria is a sole trader.At 31 December 20X4 her business statement of financial position includes the following: What is the total for current assets?

A)£245 750
B)£36 520
C)£83 530
D)£153 170

Question 14

Barry runs a small auditing firm with his partners Terry and Gerry.One of the items on the following list is a liability of their business.Which item is the liability?

A)£2000 drawn out of the business by Terry
B)Office furniture
C)Professional subscriptions payable
D)Amounts due from clients in respect of audit fees

Question 15

Burgess's business has non-current assets of £64 000, current assets of £26 000, current liabilities of £21 000 and long-term liabilities of £5000.Which one of the following statements is correct?

A)The total of capital is the same as non-current assets
B)Total assets is greater than long-term liabilities by £90 000
C)Capital is less than non-current assets
D)The total of non-current plus current assets is £4000 less than capital.

Question 16

Derry's business has non-current assets of £76 000 and total assets of £121 000.Current liabilities are £25 000 and there are no long-term liabilities.Capital is £96 000.Which one of the following statements is incorrect?

A)Current assets less current liabilities = £20 000
B)Current assets are less than capital by £51 000
C)Non-current assets are less than capital by £20 000
D)Non-current assets are greater than current assets by £56 000

Question 17

Which of the following correctly expresses the accounting equation?

A)Non-current assets - Current assets - Capital = Liabilities
B)Assets + Capital = Liabilities
C)Non-current assets + Current assets - Liabilities= Capital
D)Capital = Assets + Liabilities

Question 18

Mark's statement of financial position at 31 October contains the following balances: What is the total of capital at 31 October?

A)£13 730
B)£33 670
C)£17 450
D)£23 090

Question 19

Sarah runs a business as a sole trader.One of the items on the following list is a liability of her business.Which item is the liability?

A)Amount owing by one of Sarah's customers
B)Bank overdraft
C)Tax refund due from HMRC
D)Cash float kept in till

Question 20

Finlay's business has current liabilities of £23 000, non-current assets of £52 000 and long-term liabilities of £15 000.The total of current assets less current liabilities is £13 000. Which one of the following statements is incorrect?

A)Current assets is greater than long-term liabilities by £21 000
B)Total assets = £88 000
C)Capital is £27 000
D)Total liabilities = £38 000

Question 21

Paige's statement of financial position at 30 April 20X5 shows the following: Paige is currently negotiating a further long-term loan of £10 000.If she is successful, and assuming no other transactions, which of the following statements will be correct in respect of her business's financial position?

A)Capital will increase by £10 000
B)Long-term liabilities will increase by £10 000 but no other figure will be affected
C)The capital figure will remain unchanged
D)Current assets will remain unchanged

Question 22

Nerina's statement of financial position at 1 January 20X6 shows the following: On 2 January she receives £5000 in respect of a trade receivable.
On 3 January she pays £2000 for a new non-current asset.
Assuming there are no other transactions; if Nerina draws up a new statement of financial position at the close of business on 3 January, which one of the following statements is correct?

A)The current liabilities total is unchanged
B)The current assets total is unchanged
C)Current liabilities = £39 240
D)Current assets = £42 200

Question 23

Sergei has £8658 in his business bank account at 1 March 20X4. On 2 March he pays in a cheque due in respect of a trade receivable of £6620.
On 3 March he buys a non-current asset for £9020.
On 4 March he draws his usual monthly salary of £1000 from the business.
On 5 March he pays in a cheque for £15 000 in respect of a loan he has just received from a small business expansion scheme.The loan is due for repayment in 20X7.
Assuming that there are no other transactions, what is the balance on Sergei's business bank account at close of business on 5 March 20X4?

A)Overdraft of £7982
B)£21 258
C)£20 258
D)£7 018

Question 24

Mark's statement of financial position at 31 October contains the following balances: Which one of the following statements is correct?

A)Trade payables exceed capital by £390.
B)Current liabilities exceed current assets by £4290.
C)Current assets exceed non-current assets by £2830.
D)Capital is higher than the inventory figure.

Question 25

Ilona's business bank account at 1 May 20X7 has a balance of £13 000 in her favour. On 2 May 20X7 she buys a non-current asset for £10 000.
On 3 May 20X7 she receives an amount owing of £3 600.
Assuming that there are no other transactions, what is the balance on Ilona's business bank account at the close of business on 3 May 20X7?

A)£19 400
B)£6 600
C)£26 600
D)Overdraft of £600

Question 26

Sergei has £8658 in his business bank account at 1 March 20X4. On 2 March he pays in a cheque due in respect of a trade receivable for £6620.
On 3 March he buys a non-current asset for £9020.
On 4 March he draws his usual monthly salary of £1000 from the business.
On 5 March he pays in a cheque for £15 000 in respect of a loan he has just received from a small business expansion scheme.The loan is due for repayment in 20X7.
What is the effect of these transactions on Sergei's capital?

A)Decrease capital by £1000
B)Decrease capital by £16 000
C)Increase capital by £15 000
D)Decrease capital by £15 000

Question 27

Susannah's statement of financial position at 31 March 20X7 includes the following information: Trade payables include one amount that has been owed £4500 since 1 January.Susannah is threatened with legal action unless this amount is paid immediately.Susannah's business overdraft limit is £10 000.
Assuming that there are no other transactions, and Susannah pays the full £4500 owing, which of the two following statements are correct?
A.The current liabilities of the business will exceed current assets
B. The overdraft limit will be exceeded

A)Both A + B
B)B only
C)A only
D)Neither A nor B

Question 28

Natalia's business bank account shows a balance at 1 December 20X6 of £3350 in her favour.On 2 December she draws out £500 for her own personal use.On 3 December she pays an amount owing of £1050 and pays into the bank a cheque for £250 which is due from HMRC in respect of VAT. What is the effect of these transactions on Natalia's capital?

A)Decrease capital by £250
B)Decrease capital by £1300
C)No effect
D)Decrease capital by £500

Question 29

Ilona's business bank account at 1 May 20X7 has a balance of £13 000 in her favour. On 2 May 20X7 she buys a non-current asset for £10 000.
On 3 May 20X7 she receives an amount owing of £3600.
What is the effect of these transactions on Ilona's total assets?

A)Increase total assets by £6400
B)Decrease total assets by £6400
C)Increase total assets by £3600
D)Increase total assets by £10 000

Question 30

The balances in Mansoor's statement of financial position at 31 March are given below.Only the non-current assets balance is excluded. What is the non-current assets balance at 31 March?

A)£82 670
B)£71 730
C)£71 010
D)£62 890