What is a definition of an asset?
Assets are resources owned by an organization
What is a liability defined as?
economic obligations or payables of the business
Capital is only considered as money invested in the business? True or False
False
A loan that was taken out for 5 years requires a portion to be paid at the end of a 3 month period. Is this an example of a non-current liability?
No
A mortgage is classed as a what?
Long term liability
Which type of account contains information on people and firms?
Personal Accounts
Which class of account contains only possessions of the business?
Real Accounts
Which class of accounts contains income and expenses?
Nominal Accounts
What is an expense?
Money paid out as part of operational costs
What is revenue?
additional source of income to the organization that may not be apart of its regular trading activity
Give 3 examples of an expense
rent , salary expense, insurance etc.
Two examples of revenues
Rent received, Discounts received
Give 2 examples of an Asset
Car, Machine, Equipment
What is the accounting equation?
Assets= Capital + Liabilities
How do you find Capital?
Assets - Liabilities
A sole trader has unlimited liability. True or False
True
