Balance Sheet

Petty cash is recorded in a separate account within the general ledger. This account is classified as a current asset

The difference between the assets and the liabilities is known as equity or the net assets or the net worth

Defined as non-financial fixed Assets that do nothave physical substance but are identifiable

Prepaid expenses (e.g. prepaid insurance premiums) are usually used within a year after the balance sheet date and thus, are considered a current asset.

It is a part of reserve & surplus.

Debt that is not collectible is worthless to the Creditor

It shows that the firm has enough short term assets are there to cover its liabilities

Office Furniture can be used for a longer periodand not meant for resale. Hence it is a Fixed Asset.

It will carry no fixed or floating charge on the assets of the Company

Current Ratio is calculated by dividing currentLiabilities by Current Assets on the Balance Sheet

Shares that give share holder the right to vote on mattersof Company's Poliicy

Dangerous credit crisis

 A set of rules for recording financial information of a Business. The balance sheet is prepared in it.

 Debts must be paid within one  year or one operating cycle.

A reduction in provision for doubtful debts is a profit to the business.

Value of a financial instrument will fluctuate

 Current Assets - Current Liabilities

A Commercial mortagage wii have a term of 20 years<o:p>

 Fixed Assets are meant for long term use
Such as Land, Building and Plant and Machinery etc.<o:p>
While Current Assets are either Cash or Cash Equivalent<o:p>
Or can be converted into Cash within one year<o:p>

Smaller the ratio, greater ability to generate profit