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|Document designed to show the state of affairs of an entity at a particular date. It consists of 2 lists: Resources and Sources. The total of both list must be equal
|It is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.
|Sources - claims
|The second part of the list shows where the assets came from. It requires repayments or recompense
|Double entry bookkeeping
|A system of keeping accounting records that recognize the dual nature of every financial accounting transaction.
|Liabilities (IASB definition)
|A present obligation of the entity arising from past events. The settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.
|Claim by the owners Equity- the owner's stake in the entity
|Contains: All the positive parts of the profit (revenue) All the negative parts of the profit (expenses) Has 2 parts- Statement of total recognized gains and losses -Statement of other comprehensive income
|Assets= Capital+( Revenue-Expenses)+ Liabilities Assets= Owner's equity+ Liabilities
|Factors that will affect Capital
|profit or loss owner takes profit out owner can invest extra capital
|Resources with remaining future benefits at the period end
|The resources used up in the period
|A statement of cash flows is drawn up for the accounting period. It shows how cash come in and out in the period
|Statement of Financial position Statement of Comprehensive income Statement of Cash Flow Statement of changes in Equity Notes
|is a liability as although it injects money the bank is not an owner of the business
|Long term assets
|Are known as Non current assets these are assets that will be used for over 1 year such as Land, Equipment
|Short term assets
|Are known as Current assets these are assets that will be used under a year such as Tech