Accounting Assets

What are assets?

• Items that have no value

• Probable future economic benefits obtained or controlled by a particular entity as the result of past transactions or events

• Items that are not useful

• Probable future economic benefits that cannot be controlled

What is the definition of liquidity?

• The ability to convert revenue into cash quickly

• The ability to convert an asset into cash quickly

• The ability to convert a liability into cash quickly

• The ability to convert equity into cash quickly

Which of the following is a current asset?

• Machinery

• Accounts receivable

• Buildings

• Land

What is the useful economic life of an asset?

• The value of the asset at the end of its useful life

• The value of the asset at the time of purchase

• The estimated lifespan of the asset

• The actual lifespan of the asset

What is an example of a tangible asset?

• Intellectual property

• Patents

• Royalty rights

• Machinery

What is an example of an intangible asset?

• Land

• Buildings

• Copyright

• Inventory

What is the purpose of making an allowance for doubtful debts?

• To ensure accurate financial statements

• To decrease the value of assets

• To provide for situations where there's uncertainty

• To increase the value of assets

What is the economic substance of a transaction?

• The past events of the transaction

• The future economic benefit of the transaction

• The economic reality of the transaction

• The legal form of the transaction

What is the term used for recording an intangible asset in the balance sheet?

• Depreciating

• Expensing

• Amortising

• Capitalising

What is goodwill?

• The value of an asset at the end of its useful life

• The premium paid for a company over and above the fair value of its net assets

• The value of an intangible asset

• The value of a tangible asset