Challenge your memory

Which one is true about basic accounting equation?

• Asset = Equity - Liability

• Asset = Liability - Equity

• Equity = Asset - Liability

• Liability = Equity + Asset

Which statement define liability?

• Property belong to company

• Amount owe by company

• Amount owe to company

• Capital invested in the company

Which of the following belong to the category of current liability?

• Bank

• Fixed deposit

• Trade receivable

• Trade payable

Which of the following account have a DR balance? (can tick more than one)

• Bank overdraft

• Trade receivable

• Property, plant and equipment

• Share capital

• Prepaid expenses

Accrued expenses have a CR balance and it falls under the category of current liability.

• Yes

• No