Understanding Assets

Front

What are assets?

Back

Assets are the possessions or resources owned and controlled by an entity.

Front

Can you give examples of assets?

Back

Examples of assets include buildings, vehicles, furniture, office computers, etc.

Front

Liabilities

Back

These are the amounts owed by an entity to third parties such as banks and creditors.

Front

What is the difference between assets and liabilities?

Back

Assets are resources owned by an entity, while liabilities are obligations or debts owed to others.

Front

How do assets benefit an entity?

Back

Assets help an entity generate income, support operations, and increase value over time.

Front

Can you name two types of liabilities?

Back

Examples of liabilities include loans payable and accounts payable.

Front

Equity

Back

This is the term used to describe the amount that is owed by the company to its owners.

Front

What is the accounting equation?

Back

The accounting equation is: Assets = Liabilities + Equity.

Front

Debit

Back

meaning - to receive, or value received

Front

What is double-entry bookkeeping?

Back

Double-entry bookkeeping is an accounting system where every transaction affects at least two accounts, ensuring the accounting equation stays balanced.