Page 96 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Chapter 4

3.2 Statement of financial position

The next stage is to prepare the statement of financial position. The statement of
financial position shows the assets, liabilities and capital that exist at the date at
which it is prepared. It will include ALL the ledger accounts that still have balances
on them.

 Assets/liabilities at the end of an accounting period = Assets/liabilities at the
start of the next accounting period, e.g. the cash at the bank at the end of one
day will be the cash at the bank at the start of the following day.

 Balancing the accounts will result in: a ‘balance c/f’ (being the asset/liability at
the end of the accounting period) – a ‘balance b//f’ (being the asset/liability at
the start of the next accounting period).

90