Statement of Financial Position (Edexcel IGCSE Accounting)

Revision Note

Statement of Financial Position for Partnerships

What is the layout of the statement of financial position of a partnership?

  • The statement of financial position of a partnership is the same as that of a sole trader with the exception of the equity section

    • It first states the total assets

      • Non-current assets

      • Current assets

    • And then the total equity and liabilities

      • Equity

      • Non-current liabilities

      • Current liabilities

  • The equity section of the statement of financial position shows the balances of each partner from their capital accounts and current accounts separately

  • If the current account has a debit balance then:

    • Put brackets around the balance on the statement of financial position

    • Treat the number like a negative number

Layout of a statement of financial position for a partnership
Layout of a statement of financial position for a partnership

Worked Example

Below is the capital and current account of Adi and Bilal at 31 December 2023. Prepare an extract of the statement of financial position at 31 December 2023 showing the equity section.

Adi and Bilal

Capital Accounts

 

 

Adi 

Bilal

 

 

Adi 

Bilal

 Date

Details

 Date

Details

$

 

 

 

 

2023

Jan 1

Bal b/d 

20 000

12 000 

Adi and Bilal

Current Accounts

 

 

Adi 

Bilal

 

 

Adi 

Bilal

 Date

Details

 Date

Details

$

2023
Dec 31 

 

Drawings 

  

3 000 

 

6 000 

2023
Jan 1 

 

Balance b/d 

 

5 000 

 

1 000 

 Dec 31 

Interest on drawings 

 300 

600 

 Dec 31 

Interest on capital 

1 000 

600 

 

 Dec 31 

Salaries 

2 000 

 

 

 Dec 31 

Share of profit 

6 000 

4 000 

Answer

Balance the current accounts.

Adi and Bilal

Current Accounts

 

 

Adi 

Bilal

 

 

Adi 

Bilal

 

 

 

 

$

2023
Dec 31 

 

Drawings 

  

3 000 

 

6 000 

2023
Jan 1 

 

Balance b/d 

 

5 000 

 

1 000 

 Dec 31 

Interest on drawings 

 300 

600 

 Dec 31 

Interest on capital 

1 000 

600 

Dec 31

Balance c/d

10 700

 

 Dec 31 

Salaries 

2 000 

 

 

 Dec 31 

Share of profit 

6 000 

4 000 

       

       

Dec 31

Balance c/d

       

1 000

14 000

6 600

14 000

6 600

2024

Jan 1

 

Balance b/d

 

1 000

2024

Jan 1

 

Balance b/d

 

10 700

Enter the balances into the statement of financial position. Notice that Bilal has a debit balance in his current account, therefore this will be a negative value.

Adi and Bilal

Statement of Financial Position (extract) at 31 December 2023

$

$

$

Equity

Adi

Bilal

Capital accounts

20 000

12 000 

32 000

Current accounts

10 700

(1 000)

9 700

Total equity

41 700

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Donna Simpson

Author: Donna Simpson

Expertise: Accounting Content Creator

Donna is a classroom practitioner with over 25 years experience in teaching accounting and business studies at GCSE A-Levels and undergraduate levels, both in the UK and abroad. She currently works for a Multi-Academy Trust (MAT) as a teacher, instructional coach and mentor to other teachers. Donna is also an AQA A Level Accounting examiner as well as the content creator of resources used by all accounting teachers across the Trust. She enjoys designing and creating resources that provides students with deeper understanding of the subject content. Donna has a Bachelor of Science Degree in Business Administration with major in Accounting and Finance (BSc Hons) and ACCA certified to Level 2.

Dan Finlay

Author: Dan Finlay

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Dan graduated from the University of Oxford with a First class degree in mathematics. As well as teaching maths for over 8 years, Dan has marked a range of exams for Edexcel, tutored students and taught A Level Accounting. Dan has a keen interest in statistics and probability and their real-life applications.