Chapter 1 Introduction to accounting

Write the equation to show the relationship between assets, liability and owners equity

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Resources owned by a company (such as cash, trade receivables, vehicles) are reported on the statement of financial position and are referred to as __________.

• Liabilities

• Assets

• Income

• Owner's Equity

Obligations (amounts owed) are reported on the statement of financial position and are referred to as __________.

• Assets

• Liabilities

• Equity

• Debt

How many accounts, at a minimum, are required for accounting entries?

• 1

• 2

• 3

• 4

Identify two causes of failure in a business

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Which of the following are assets?

• Bank account

• Vehicles

• Bank overdraft

• Furniture

• Credit card

If I invest $2000 in my own business this causes:

• An increase of $2,000 in equity column

• An increase in Income column of $2,000

Which of the following is not a business transaction?

• Bought furniture of $10,000 for business

• Paid for salaries of employees $5,000

• Paid son's fees from her personal bank account $20,000

• Paid son's fees from the business $2,000

The process of identify, classify, recording and communicating business transaction is called as book-keeping.

• True

• False

Accounting is referred to as the "language of ___________________."

• Profit

• Life

• Accounting

• Business