Week 2

Question 1

Types of Accounts

Answer 1

Assets, Liabilities, Revenue/Income, Expenses, Equity, Drawings.
Every transaction has two effects

Question 2

Assets

Answer 2

Item owned/used by business. A resource controlled by business that will produce future economic benefits for business

Question 3

Current Assets

Answer 3

Held for short period of time
Held for sale or consumption during business operating cycle
Expect to be sold within a year
Held for trading
Cash/Cash Equivalent- easily marketable, short term investments

Question 4

Examples of Current assets

Answer 4

Current assets with high liquidity (converted into cash in 90 days)- cash, commercial paper, short term gov bonds
Inventories, trade receivables, prepayment

Question 5

Non current assets

Answer 5

Assets used in business in long term to generate wealth

Question 6

Example of non current assets

Answer 6

Property, Plant, Equipment, Land, Buildings, Machinery, Vehicles