Chapter 2

Which of the following is not an element of the financial statements?

• Assets

• Liabilities

• Expenses

• Inventory turnover

Which of the following best describes liabilities?

• Resources controlled by the business

• Owner’s interest in the business

• Obligations to be settled in the future

• Costs incurred to earn revenue

Which of the following would be classified as an asset?

• Creditors

• Bank loan

• Office equipment

• Capital

Which element of the financial statements refers to the owner’s residual interest in the assets of the business after deducting liabilities?

• Revenue

• Owner's Equity

• Assets

• Expenses

Which of the following would be classified as owner's equity?

• Capital

• Mortgage

• Overdraft Bank

• Cash

Which of the following would be classified as a liabilities?

• Factory

• Copy Right

• Creditors

• Capital

Which of the following would be classified as an intangible assets?

• Patent

• Vehicle

• Mortgage

• Bank

Which of the following would be classified as expenses?

• Loan

• Utilities

• Investment

• Sales

Which of the following would be classified a revenue?

• Rent

• Sales

• Discount

• Purchase

Which of the following best describes assets?

• Obligations of a business arising from past transactions, expected to be settled in the future

• The residual interest in the assets of the business after deducting liabilities.

• Resources owned or controlled by a business that are expected to provide future economic benefits.

• Amounts earned by a business from the sale of goods or services.