☆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 | $ | $ | 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. W Xang Statement of Financial Position as at 31 December 20x6 | $ | $ | | $ | $ | Non-current assets | | | Non-current liabilities | | 1,000 | Motor van | | 2,400 | Trade payable | | 1,700 | | | 2,400 | Total liabilities | | 2,700 | | | | Capital account | | | Current assets | | | Balance at 1 January 20X6 | 4,200 | | Inventory | 2,390 | | Add net profit for year | 3,450 | | Trade receivables | 1,680 | | Increase in capital | 1,000 | | Cash at bank | 1,704 | | | 8,650 | | Cash in hand | 56 | | Less: Drawing for year | -2,960 | | Total current assets | | 5,990 | | | 5,690 | Total assets | | 8,390 | Total capital and liabilities | | 8,390
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