Page 284 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 5 Financial information and decisions

Revision checklist Exam practice questions

● The balance sheet records all of the assets 1 The data below has been extracted from the balance sheet of
(what a business owns) and liabilities (what a limited liability company, Safi ya Soft Furnishings (SSF).
a business owes) on a particular date.
30 June 2012 30 June 2013
● Assets can be divided into non-current
assets and current assets. Liabilities can $000s $000s
also be divided into those that are non-
Non-current assets 2,500 2,900
current and those that are current.
Net current assets 230 150
● The balance sheet shows the amount
of capital invested in the business by Non-current liabilities 130 420
the owners and how much the business
Shareholders’ equity 2,600 2,630
owes to the owners.
● Internal and external stakeholder groups
a What is meant by ‘limited liability’? [2]
will find information contained in the
balance sheet useful when considering the b Identify two examples of non-current assets
extent to which a business helps to satisfy that SSF might have. [2]
their personal objectives.
c Identify and explain two elements that might
make up SSF’s shareholders’ equity. [4]

d Identify and explain how two stakeholder groups
of SSF might use the balance sheet data. [6]

e Do you think the management of SSF should be
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concerned about the change in net current assets
between 2012 and 2013? Justify your answer. [6]

2 Below are extracts from the balance sheets of BJ
for 2012 and 2013.
2012 2013
$m $m
Non-current assets 2.7 2.9
Current assets 0.5 0.8
Current liabilities 0.3 1.0
Non-current liabilities 1.0 1.1
Owner’s equity 1.9 2.2

a Identify two non-current assets that BJ might have. [2]

b What is meant by ‘non-current liabilities’? [2]
c Identify and explain two elements of BJ’s
current assets. [4]
d Identify and explain two differences between BJ’s
balance sheet data between 2012 and 2013. [6]

e Do you agree that the information from BJ’s balance
sheets is more useful to internal stakeholders than
external stakeholders? Justify your answer. [6]

Total available marks 40