Lesson 2-3 Assets, Liability and Owners Equity

Question 1

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

Current Liabilities

Answer 2

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

Question 3

Non-Current Assets

Answer 3

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 4

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

Owners Equity

Answer 5

The residual interest in the assets of the entity after all its liabilities are deducted.

Question 6

Accounting Entity Assumption

Answer 6

Assets, Liabilities and business activities of the entity are kept COMPLETELY separated from those of the owner of entity