Understanding Assets and Liabilities

What are assets?

• Financial obligations owed by a business

• Resources owned by individuals or businesses expected to provide future economic benefits

• Money received in advance for services to be delivered in the future

• Expenses incurred but not yet paid

Which of the following is an example of a current asset?

• Property, Plant, and Equipment (PP&E)

• Patents

• Inventory

• Long-term Investments

What is the primary purpose of understanding a company's assets?

• To determine the company's liabilities

• To assess a company's net worth

• To calculate the company's tax obligations

• To evaluate the company's marketing strategy

Which of the following is a non-current asset?

• Cash and Cash Equivalents

• Accounts Receivable

• Equipment

• Inventory

What are liabilities?

• Resources owned by a business

• Financial obligations or debts owed by individuals or businesses

• Assets that provide future economic benefits

• Goods held for sale

Which of the following is an example of a current liability?

• Long-term Debt

• Deferred Tax Liabilities

• Accounts Payable

• Contingent Liabilities

How is net worth calculated?

• Total Liabilities - Total Assets

• Total Assets + Total Liabilities

• Total Assets - Total Liabilities

• Total Liabilities / Total Assets

What is the importance of understanding net worth?

• It helps in determining the company's marketing strategy

• It provides a snapshot of financial health

• It calculates the company's tax obligations

• It evaluates the company's customer satisfaction

Which of the following is a non-current liability?

• Accounts Payable

• Short-term Debt

• Long-term Debt

• Accrued Expenses

What is the role of current assets in a business?

• They are critical for long-term growth and stability

• They are essential for day-to-day operations

• They provide competitive advantages

• They are used for marketing purposes