Accounting: Assets, Liabilities and Capital

On which financial statement does a company report its capital?

• Balance Sheet

• Cash flow statement

• Income Statement

• Shareholder equity statement

What are two different definitions of capital?

• Assets that cannot be converted to cash and contributions made to a business for the purchase of assets.

• One of three basic factors of production that can be used to generate income or the money or property contributed to a business for the purchase of assets.

• Plant and equipment.

• Money and property.

What's the difference between a long-term, asset and a short-term asset?

• A long-term asset has been held for five years, a short term asset has not.

• A long-term asset takes over a year to convert to cash, a short term asset does not.

• A long-term asset is a physical asset, a short-term asset is not.

• A long-term asset in included on the balance sheet, a short-term asset is not.

______________ are assets that can be physically touched.

• Intangible assets

• Trade names

• Tangible assets

• Domain names

Items that have a monetary value and are owned by a business are called ____________.

• Notes payable

• Liabilities

• Stockholder's equity

• Assets

An example of an intangible asset is ___________.

• A trade name

• A building

• Land

• Machinery

Current assets are assets that _________ within one year of the balance sheet date (usually one year).

• Are expected to be sold

• Can be converted to cash

• Will be used up

• All of the answers are correct

Assets are reported on that ____________.

• Balance sheet

• Statement of cash flow

• Income statement

• None of the answers are correct

According to the accounting equation, accounts are balanced when assets:

• Are multiplied by liabilities

• Are equal to liabilities plus owners' equity

• Are subtracted from liabilities

• Are divided by owners' equity

On January 1st 2023, Alaia invested a cash amount of MVR 100,000 to start her salon. Determine the asset, liability and capital value of her salon as of January 1st, 2023.

• Assets= MVR 0, Liabilities = MVR 0, and Capital = MVR 100,000

• Assets = MVR 100,000, Liabilities = MVR 100,000, and Equity = MVR 100,000

• Assets = MVR 0, Liabilities = MVR 100,000, and Capital = MVR 100,000

• Assets = MVR 100,000, Liabilities = MVR 0, and Capital = MVR 100,000