Assets, Liabilities, Expenses and Gains Assignment

DESCRIBE YOUR BUSINESS
ASSETS, LIABILITIES,
EXPENSES AND GAINS.

TABLE OF CONTENTS
TASK 5............................................................................................................................................1
Description of business assets, liabilities, expense and gains.....................................................1
Measure for avoiding cash flow problems..................................................................................2
REFERENCES................................................................................................................................3

TASK 5
Description of business assets, liabilities, expense and gains
The assets are distinctive in fixed and current assets where fixed assets are obtained and
purchased with long term perspective like buildings, equipment and land. Fixed assets play role
in company's activities for long term perspective as it could be implied for operational activities
with fulfilment of its objective. Current assets are used with short duration or transformed in cash
form in short duration which is period of one year in the future. Liabilities are financial
obligations or debt within business entity with bound to pay as it is also classified in long- and
short-term liabilities (Macaulay, 2018). It could be settled by paying particular amount within
specified duration and its example could be account payables, debt etc.
Furthermore, expense is ongoing payment for something which has absence of tangible
value or services as expenses are implicated for generating revenue. With reference to public
sector, it is distinguished among non-tax and tax revenues whereas non-tax is originated through
charges or fees for public services, concessions and franchises. In the similar aspect, tax
revenues is the income originated through different types of taxes (Larson, Sloan and Zha Giedt,
2018). The gains consider economic benefits which is outside normal operations of business
which typically from increment in value of asset. For example disposal of asset is a gain.
Asset and liabilities
Particulars Figure (in pounds)
Assets
Current assets 6000
Noncurrent asset 7200
Total assets 13200
Liabilities
Current liabilities 5280
Noncurrent liabilities 7920
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Total liabilities 13200
Budget
Particulars Figure (in pounds)
Cash inflows
Opening cash inflow 20000
Total revenue 10000
Other income 2000
Cash inflows (total) 32000
Cash outflows
Material 10000
Labour 14000
Other Expenses 2200
Administration expenses 4000
Cash outflows (Total) 30200
Cash Deficit 1800
Measure for avoiding cash flow problems
In this aspect, cash flow must be forecasted and target must be set and invoices should be
sent on prompt aspect. The stock could be managed in efficient aspect as stock records should be
reconciled in bank account. Good relationship must be developed with banks and lenders with
application of trust whereas credit should be accessed and outgoings should be tightening. The
most important way is to anticipate problems where they happen (Claessens, Coleman and
Donnelly, 2018).
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For instance, companies like Stripe and Xero had offered efficient automated invoicing
along with better management of payments and chasing customers for payments helps to avoid
cash flow problems (Leo Giosuè, 2018).
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REFERENCES
Books and Journals
Claessens, S., Coleman, N. and Donnelly, M., 2018. “Low-For-Long” interest rates and banks’
interest margins and profitability: Cross-country evidence. Journal of Financial
Intermediation. 35. pp.1-16.
Larson, C. R., Sloan, R. G. and Zha Giedt, J., 2018. Defining, Measuring and Modeling
Accruals: A Guide for Researchers.
Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
Society Canon (pp. 155-167). Routledge.
ONLINE
Leo Giosuè. 2018. 40% of companies face cash flow problem. [Online]. Available through
<https://www.jpost.com/Special-Content/40-percent-of-companies-face-cash-flow-
problems-570179>.
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