POA theory CH3

Question 1

assets

Answer 1

assets are resources owned by the business that are expected to provide future benefits

Question 2

liabilities

Answer 2

liabilities are obligations owed by a business to others that are expected to be paid in the future

Question 3

equity

Answer 3

claim by the owner(s) on the net assets of a business

Question 4

income

Answer 4

amounts earned from the activities of a business

Question 5

expenses

Answer 5

costs incurred to earn income in the same accounting period

Question 6

capital

Answer 6

resources contributed by the owner for business use