Accounts Topic 2

Which of the following is the accounting equation?

• Assets = Capital - Liabilities

• Capital = Liabilities + Sales

• Liabilities = Capital X Assets

• Assets = Liabilities + Capital

What are assets?

• anything owned by the business (e.g. car, buildings, bank)

• Buildings and expensive inventory owned by the business

• Inventory owned by the business only

• anything owed by the business

What is capital?

• Capital is the amount of money placed at the beginning of the business

• All the profit done

• Assets and some buildings

• The money or resources invested by the owner and left for use within the firm.

What are liabilities?

• Funds owned by the firm to third parties

• Funds owed by the firm to third parties

• Liabilities are liable abilities

• Liabilities are businesses

(Write the correct word which should be in the space provided)

Bank is the money that is _____________ by the firm that is kept within an account at the bank.

(Write the right words in the space provided)

What is inventory (stock)?

_________ ___________ by the business with the intention to resell them at a profit

(Write the correct words in the space provided)

What are accounts receivable?

_____________ ____________ to the business by customers for goods supplied or services rendered.

Tick all the liabilities

• Loan

• Bank Overdraft

• Accounts Payable

• Stock

(Write the correct words in the space provided)

What is a bank overdraft?

When the firm ___________ more funds from its bank account than it actually has. This is treated as money borrowed from the bank.

What are accounts payable?

• Money owed by the business to suppliers for goods supplied or services rendered.

• Money owned in the business

• Money owed by the business to the bank for the loan taken

• Money won from a lottery