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Statement of Financial Position HELP!

Mollypod88Mollypod88 Well-KnownRegistered Posts: 155
in AAT Level 3 (Level 6 in Scotland)
When completing a Statement of Financial Position is there a certain way you have to lay our Current Assets and Liabilities?

Thank you!!

Comments

  • MarkTMarkT Trusted Regular Registered Posts: 302
    Assets & Liabilities have to be placed in their order of liquidity.

    Assets:

    Start with the least downwards

    Stock
    SLCA
    Prepayments
    Bank
    Cash

    Liabilities

    PLCA
    Bank (overdraft)
    Accrual
    VAT

    This is the usual order :001_smile:
  • Mollypod88Mollypod88 Well-Known Registered Posts: 155
    Sorry I'm having a really stupid day today :huh:

    What does order of liquidity mean?
  • KaySarahKaySarah Well-Known Registered Posts: 215
    Mollypod88 wrote: »
    Sorry I'm having a really stupid day today :huh:

    What does order of liquidity mean?

    How "LIQUID" they are (how much money they have) ... when one goes Into Liquidation it is because they have no money.
  • crispycrispy Trusted Regular SouthamptonRegistered Posts: 456
    As above - liquidity, how quickly/readily an item can be converted back into cash. Eg. stock has to be sold first, so is the least liquid, cash at bank most liquid (as it is cash).
  • Mollypod88Mollypod88 Well-Known Registered Posts: 155
    Thanks everyone :laugh:
  • YaziYazi Well-Known Registered Posts: 225
    I remember Assets like this : Sit Down Pretty Black Cat.....

    Stock = Sit
    SLCA = Down (Debtors)
    Prepayments = Pretty
    Bank = Black
    Cash = Cat
    rodgerss
  • SarahJSSarahJS Trusted Regular Registered Posts: 273
    I'm not 100% sure, but for the exams I don't think it matters (obviously best practice for real life though!).

    I'm sure I even saw balance c/d not at the end of the account in the solutions for an AP2 question (a find the missing balance one).
  • MarkTMarkT Trusted Regular Registered Posts: 302
    Yazi wrote: »
    I remember Assets like this : Sit Down Pretty Black Cat.....

    Stock = Sit
    SLCA = Down (Debtors)
    Prepayments = Pretty
    Bank = Black
    Cash = Cat
    Thats a pretty clever little tip - will remember that for future
    SarahJS wrote: »
    I'm not 100% sure, but for the exams I don't think it matters (obviously best practice for real life though!).

    I'm sure I even saw balance c/d not at the end of the account in the solutions for an AP2 question (a find the missing balance one).

    It matters, trust me - you may collect points for getting the correct answer, but you can also lose them for a failure in method.

    AFAIK, there are three areas of marking, I may be wrong :blush: Calculation, Method and Fundamental - please someone correct me if I am wrong on these points
    rodgerss
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