The Financial Reporting Council (FRC) in the UK has set out an accounting standard for micro-entities, which are the very smallest companies. Typically they have fewer than 10 employees. One permitted outline for a statement of financial position (balance sheet) is shown here.

Discussion points

1 How does the statement of financial position reflect the accounting equation?

2 What further questions would you ask about the statement of financial position?

Transcribed Image Text:

Assets Fixed assets Current assets Prepayments and accrued income Capital, Reserves and Liabilities Capital and reserves Provisions for liabilities Creditors Amounts falling due within one year X Amounts falling due after one year X Accruals and deferred income X X X X X X X XI XI