Chapter 2

Question 1

What is a Current Asset

Answer 1

asset which is expected to be turned into cash or consumed within one year of operating cycle (listed In order of liquidity)

Question 2

Types of Current Assets

Answer 2

Cash
Accounts Receivable
Notes Receivables
Inventory
Supplies
Prepaid Expenses

Question 3

What is a Non-Current Asset

Answer 3

aka long-term asset. An asset not expected to be turned into cast or consumed within one year of the operating cycle.

Question 4

Types of Non-Current Assets

Answer 4

Land
Buildings
Long-term investments 
PPE (tangible assets)
Depreciation

Question 5

What is a Contra Account

Answer 5

An account which reduces the value of a related account. Every contra account is directly related to another account. (ex: dividends declared is a contra shareholders equity account, Accumulated depreciation of building or equipment is a contra account to equip or buildings)

Question 6

What is a Current Liability

Answer 6

an obligation to be paid within the one year operating cycle

Question 7

Types of Current Liabilities

Answer 7

Bank Indebtedness
Accounts Payable
Deferred Revenue

Question 8

What is a Non-Current Liability

Answer 8

obligation that is to be paid after the financial statement is due

Question 9

Types of Non-Current Liabilities

Answer 9

Lease Liabilities
Pension and Benefit Liabilities
Deferred income tax

Question 10

Statement of Cash Flows in and out

Answer 10

In: cash sales, collection of accounts receivable, bank loan borrowing.

out: purchasing equipment or inventory with cash, salaries.