Dividends On Balance Sheet As Well As Dividends Declared After Balance Sheet Date With Dividends Payable Presentation On The Balance Sheet Plus Dividends
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On the other hand long-term assets which can include land inventory and equipment are paid off and will benefit the company over an extended period of time. Accumulative depreciation is used on balance sheets to explain how the cost of long-term assets are "used up" during the process of running a business. The cost is spread over the life of the asset. For example say a piece of machinery cost $50 000 and the useful life of the machine is 20 years therefore in the first year the accumulative depreciation for the equipment is $2 500. Liabilities can simply be explained as the amounts owed to other organizations such as the transfer of assets or services that need to be provided. Liabilities are also made up of current and long-term.
If you are managing your money to deal with life s challenges and planning your personal finances with your retirement in mind your Net Worth should be positive and growing. If your Net Worth is positive you can ride out financial storms like the current situation. At the time of your retirement your Net Worth must be substantially positive so that you will be able to keep costs down and have investment income to replace your working income. During your working years your Net Worth should be growing steadily because a retirement nest egg does not grow without years of nurturing. • There are circumstances where it is acceptable to have a Net Worth of Zero or near Zero. The first is when you are just starting out.
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Non-current assets therefore contains all resources owned by the company that have a useful life of more than one year. These assets are often referred to as Capital Assets which include equipment buildings and land. Notice that all assets mentioned thus far whether current or non-current can be classified as Tangible Assets which contain physical substance. However the balance sheet also presents Intangible Assets which are reported as non-current capital assets as well since they have a useful life of more than one year but do not have any physical substance such as goodwill and patents. The sum of the current and non-current assets will equate to and be reported on the balance sheet as Total Assets of the company. Liabilities: represents the claims against the company s assets that have not been paid at the balance sheet date. Therefore they are obligations to the company s creditors.