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By Richard Ward
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This gave them the necessary funds to purchase a laser cutting machine to help them design bespoke logos for sport teams and to have a professionally designed e-commerce website created. In addition to this they arranged a leasing agreement for two heat-sealing machines that allowed them to put their designs onto actual kit. SUMMARY This provides you with a brief overview of Kitlocker, which we will come back to regularly during this chapter and again throughout the book. The Kitlocker partnership will be used to illustrate a number of key financial decisions and help you to put the theory you are learning into practice.
37 the ‘rules’ of financial accounting 4 Are these statements true or false? a Assets are items or resources that have a value to the business and things that are used by the business and for the business. b Liabilities are amounts owed to the business by other people. c Capital is generally considered to be the owners’ stake in the business and may also be called equity. d Debtors are an entity or person who owes money to the business. e Creditors are amounts owned by the business that are of value.
Although they have purchased something it is classified as an asset. The company used the asset of cash to get the asset of machinery. If we get technical here they have traded a current asset for a fixed asset. Have a look at how the accounting equation is now. £9,500 (Assets) = £9,500 (Capital) + £0 or £1,800 (Fixed Asset, Machine) + £7,700 (Current Asset, Cash) = £9,500 (Capital) + £0 (Liabilities) ▼ 47 financial accounting – the mechanics Once in existence the company began making sales. In doing so it needed to buy things from suppliers and sell them to customers.
Aerobatic teams by Richard Ward