Assets, Liabilites, Capital

Question 1

Define Asset

Answer 1

These are the total resources owned by the business

Question 2

List 2 types of Assets

Answer 2

1) Fixed assets
2) Current assets

Question 3

Define Fixed Asset

Answer 3

These are the total resources owned by the business of permanent nature

Question 4

Examples of fixed assets in order or performance

Answer 4

1) Land & Building or Premises
2) Fixtures & Fittings
3) Machinery & Equippment
4) Furniture & Appliances
5) Motor Vehicles

Question 5

What is Performance?

Answer 5

This refers to listing fixed assets from most long lasting to least long lasting

Question 6

Define Current Assets

Answer 6

These are the total resources owned by the business of a temporary nature

Question 7

Examples of Current Assets in order of least liquid to most liquid

Answer 7

1) Inventory on stock of goods
2) Accounts Receivable or Debators
3) Prepayments
4) Cash at Bank
5) Cash in Hands

Question 8

What is Liquidity?

Answer 8

This refers to the ease at which the business is able to convert current assets to cash

Question 9

Define Inventory

Answer 9

This refers to the stock on goods purchased by the business for the purpose of resale

Question 10

Define Accounts Receivable

Answer 10

The customers who owe the business money
for goods and services

Question 11

Define Liabilities

Answer 11

These are the debts owed by the busiess .

Question 12

List 2 types of Liabilities

Answer 12

1) Long term liabilities
2) Current liabilities

Question 13

Define Long Term Liabilites

Answer 13

These are the debts owed by the business that has to be repaid in over 1 year

Question 14

List 2 examples of Long Term Liabilities

Answer 14

1) Loan
2) Mortgage

Question 15

Define Current Liabilities

Answer 15

These are the debts owed by the business that has to be repaid in under 1 year

Question 16

List 3 examples of Current Liabilities

Answer 16

1) Accounts Payables
2) Accruals
3) Bank overdraft

Question 17

Define Accounts Payables

Answer 17

These are the suppliers whom the busiess owes money to for goods and services

Question 18

Define Accruals

Answer 18

These are the expenses incurred during the period but still being owed at the end of the accounting period

Question 19

Define Capital/Owner’s Equity

Answer 19

These are the total resources invested or supplied to the business by the owner

Question 20

Example of Capital

Answer 20

Personal Savings