Accounting Concepts

What is the definition of an Asset ?

• Assets are things that the are owned by the business, that have monetary value.

• An asset is a liability that decreases in value over time.
• An asset is a non-physical item that cannot be owned or controlled.
• An asset is a financial obligation that must be paid immediately.

What is the definition of Capital ?

• Capital is the process of creating new businesses.
• Capital is the name of a city.
• Capital is all the money, property and goods that a business can use to make an income.

• Capital is a type of food.

What is the definition of liabilities ?

• Liabilities are financial obligations or debts that a company owes to someone or another business.

• Liabilities are assets owned by a company
• Liabilities are revenues generated by a company
• Liabilities are expenses incurred by a company

What is the definition of expenses ?

• Money earned from sales
• Assets owned by a company
• Expenses are any payments that you need to make for your business to be able to run. Expenses decrease the owners equity.
  

• Liabilities owed by a company

What is the definition of income ?

• Income is all the money that a business earns either by selling a product or by charging people for a service offered.

  Income has a positive effect on the business’ net worth.

• Income is the money that an individual borrows from others
• Income is the money that an individual spends on goods and services
• Income is the money that an individual receives from the government for no reason