GCSE-ready- Home
- Lessons
- IGCSE Accounting
- Statement of financial position of a sole trader
Statement of financial position of a sole trader
🎬 The doodle video for this lesson is coming soon. Subscribe on YouTube to see it first.
The statement of financial position shows what a business owns and owes, and how much the owner has invested, at the end of the year.
Assets and liabilities
Non-current assets: at cost less accumulated depreciation (premises, equipment, vehicles).
Current assets: inventory, trade receivables (less provision), other receivables, bank and cash.
Current liabilities: due within a year: trade payables, other payables, bank overdraft.
Non-current liabilities: due after more than a year, such as a long-term loan.
Current assets: inventory, trade receivables (less provision), other receivables, bank and cash.
Current liabilities: due within a year: trade payables, other payables, bank overdraft.
Non-current liabilities: due after more than a year, such as a long-term loan.
Capital
Opening capital + capital introduced + profit for the year − drawings = closing capital
(A loss is deducted instead of profit.)
Net assets = total assets − total liabilities, and this equals closing capital.
(A loss is deducted instead of profit.)
Net assets = total assets − total liabilities, and this equals closing capital.
Layout
Opening capital is £40 000, profit for the year £15 000 and drawings £9000. Find the closing capital.
- 40 000 + 15 000 − 9000
Answer: £46 000
Show non-current assets at carrying amount, then current assets, current liabilities and non-current liabilities. Closing capital = opening capital + capital introduced + profit − drawings. Net assets equal closing capital.
The interactive lesson includes the diagrams for this topic.
Check you have got it
Answer 7 quick questions with instant marking. If you get one wrong, GCSE-ready shows you why and gives you another go. It is free, and you do not need an account.