Statement of Financial Position HELP!

Mollypod88
Mollypod88 Registered Posts: 155 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
When completing a Statement of Financial Position is there a certain way you have to lay our Current Assets and Liabilities?

Thank you!!

Comments

  • MarkT
    MarkT 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:
  • Mollypod88
    Mollypod88 Registered Posts: 155 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
    Sorry I'm having a really stupid day today :huh:

    What does order of liquidity mean?
  • KaySarah
    KaySarah Registered Posts: 215 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
    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.
  • crispy
    crispy Registered Posts: 465 Dedicated contributor ๐Ÿฆ‰
    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).
  • Mollypod88
    Mollypod88 Registered Posts: 155 Beyond epic contributor ๐Ÿง™โ€โ™‚๏ธ
    Thanks everyone :laugh:
  • Yazi
    Yazi Registered Posts: 225 Dedicated contributor ๐Ÿฆ‰
    I remember Assets like this : Sit Down Pretty Black Cat.....

    Stock = Sit
    SLCA = Down (Debtors)
    Prepayments = Pretty
    Bank = Black
    Cash = Cat
  • SarahJS
    SarahJS Registered Posts: 273 Dedicated contributor ๐Ÿฆ‰
    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).
  • MarkT
    MarkT Registered Posts: 302
    Yazi wrote: ยป
    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
    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
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