Business 7115 · O Level · Statement of financial position

Statement of financial position — practice question

VCG makes high-quality briefcases and travel bags. VCG employs 50 skilled production workers at its factory. VCG is intending to grow by constructing a second factory. Several possible locations are under consideration. The Managing Director is examining VCG’s financial statements. An extract is shown in Table 3.1. Both internal and external stakeholder groups of VCG are keen to see this information.
(a)[2]

Define the term ‘shareholders’ equity’.

(b)[2]

Identify two financial statements that a public limited company is legally required to publish every year.

(c)[4]

State whether each of the following is a current asset or a current liability. Overdraft: Trade receivables: Trade payables: Cash in bank:

(d)[6]

Explain one way each of the following stakeholder groups could use VCG’s accounts: Shareholders: Suppliers:

(e)[6]

Do you think access to labour is the most important factor for a manufacturing business to consider when choosing where to locate a new factory? Justify your answer.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “The total amount of owners’ funds invested in the business” …

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