Lesson 1 (Elements revenues and expenses)

Question 1

Define current assets

Answer 1

A present economic resource controlled by the entity (as a result of past events) that is reasonably expected to be converted to cash, sold or consumed within the next 12 months after the end of the reporting period.​

Question 2

Define non current assets

Answer 2

A present economic resource controlled by the entity (as a result of past events) that is not held for resale and is reasonably expected to be used for more than the next 12 months after the end of the reporting period.​

Question 3

Define current liabilities

Answer 3

A present obligation of the entity (arising from past events) ​that is reasonably expected to be settled with a transfer of an economic resource within the next 12 months after the end of the reporting period.​

Question 4

Define non-current liabilities

Answer 4

A present obligation of the entity (arising from past events) that are not expected to be settled with a transfer of an economic resource within the next 12 months after the end of the reporting period.

Question 5

Define owners equity

Answer 5

The residual value in the assets of the entity after deducting all its liabilities.​

Question 6

Define revenue

Answer 6

Are increases in assets or decreases in liabilities that result in increases in owner’s equity, other than those relating to contributions from the owner.​

Question 7

Define an expense

Answer 7

Are decreases in assets or increases in liabilities that result in decreases in owner’s equity, other than drawings.​