Form 3 POA - The Accounting Equation

What is an Asset ?

• Money the business OWES

• Anything the business OWNS which will bring future benefits

Capital is the same as Owner's Equity or the owner's investment in the business

• True

• False

Which is an Asset ?

• Premises/Land

• Loan

A liability is anything the business OWES

• True

• False

Which is a Liability ?

• Debtors

• Creditors

A Debtor is someone who owes money to the business.

• True

• False

Which is the correct Accounting Equation ?

• Assets + Liabilities = Capital

• Assets = Liabilities + Capital

Motor Vehicles and Furniture are examples of Fixed Assets

• True

• False

Which is a Current Asset ?

• Capital

• Cash

If Assets = $500 and Liabilities = $300, then what is the value of Capital ?

• $200

• $800