Chapter 3 Flashcards
1
Q
Define Assets
A
Assets are resources that a business owns or controls that are expected to provide future benefits
2
Q
Define Liabilities
A
Liabilities are obligations owed by a business to others that are expected to be settled in the future
3
Q
Define Equity
A
Equity is the claim by the owner on the net assets of a business
4
Q
Define Income
A
Income is the amounts earned from the activities of a business
5
Q
Define Expenses
A
Expenses are cost incurred in the operation of a business to earn income in the same accounting period
6
Q
List 8 examples of Assets
A
Office Equipment Motor Vehicles Inventory Trade Receivables Cash at bank Cash in Hand Income Receivables Prepaid expenses
7
Q
List 6 examples of Liabilities
A
Loan from X Mortgage Loan Trade Payables Income received in advance Expense payable Bank Overdraft
8
Q
What are 3 examples of Equity in Solo Proprietorship
A
Capital
Profit or loss for the period
Drawings
