Ag Mech one 2.02

Front

What are debts that a business owes?

Back

Liabilities.

Front

What is net worth?

Back

Total assets minus total liabilities.

Front

What is the term for the owner's claim on the assets of a business?

Back

Equity.

Front

What is something of value that a person or business owns?

Back

An asset.

Front

Which of the following is considered an asset? Cash in hand, Accounts payable, Bank loan, Owner's equity?

Back

Cash in hand.

Front

What is the definition of an asset?

Back

Anything of value owned by a person or business.

Front

What is the definition of a liability?

Back

A financial obligation or debt owed by a business.

Front

What does equity represent in a business?

Back

The owner's claim on the assets after all liabilities have been deducted.

Front

How do you calculate net worth?

Back

Net worth = Total assets - Total liabilities.

Front

What is the difference between current assets and current liabilities?

Back

Current assets are assets expected to be converted to cash within a year, while current liabilities are obligations due within a year.