Preparatory

What is capital in a business?

• Business profit

• Owner’s investment

• Bank loan

• Employee salary

Equity in accounting refers to:

• Business losses

• Bank balance

• Owner’s claim in the business

• Money owed to suppliersv

Retained earnings are:

• Cash earned and saved in a locker

• Profits kept in the business

• Cash invested by the owner

• Income from new capital

Dividend is:

• Loan from bank

• Tax paid

• Profit given to shareholders

• Owner’s equity

An example of liability is:

• Inventory

• Salaries due to employees

•  Equipments

• Land

Which of these is not an asset?

• Cash

• Machinery

•  Inventory

• Loan taken

Trade Payable is:

• Cash in hand

• Amount owed to suppliers

• Money owed by customers

• Owner’s investment

Trade Receivable is:

• Loan to the company

• Money to be received from customers

• Bank overdraft

• Owner’s salary

Current assets are:

• Used for more than a year

• Can be quickly converted into cash

• Buildings

• Machinery

Non-current assets include:

• Cash

• Inventory

• Land

• Accounts receivable