COMMERCE 2FA3 Chapter Notes - Chapter 1: Sole Proprietorship, Chief Financial Officer, Limited Liability
3 May 2016
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Document Summary
A balance sheet is a financial shot of the firm and its activities at a single point in time. The assets of the firm are on the left side of the balance sheet. Fixed assets are those that will last long (i. e. buildings). Before a company can invest in an asset, it must obtain financing; the forms of financing are represented on the right side of the balance sheet. A firm can issue debt (loan agreements) or equity shares (stocks). Short-term debt represents loans and other obligations that must be repaid within a year. Long-term debt is debt that can be repaid beyond a year. Shareholders equity represents the difference between the value of the assets and the debt of the firm; it"s the residual claim on the firm"s assets. Net work capital are the current assets minus the current liabilities. Reporting to the chief financial officer are the treasurer and the controller.
