Chap 3 Quiz Flashcards Preview

POA sec 3 > Chap 3 Quiz > Flashcards

Flashcards in Chap 3 Quiz Deck (9)
Loading flashcards...
1
Q

What is an Asset?

A

Resources owned or controlled by the business to carry out its activities

2
Q

What is an Equity?

A

Amount contributed by the owner and profit made by the business

3
Q

What is an Expense?

A

Incurred by business to generate income

4
Q

What is an Income?

A

Amount earned from mainly selling goods or providing services

5
Q

What is a Liability?

A

Amount owned or controlled by the business to carry out its activities

6
Q

Explain the difference between inventory and no current assets?

A

Inventory are goods purchased with the intention of resale

non current assets are purchased with the intention to be used in the business to generate income

7
Q

Explain the difference between asset and expense?

A

Benefits obtained from assets will last longer than benefits obtained from expenses for business

8
Q

Explain the difference between liabilities and equity?

A

Liabilities are amounts owed by the business to other businesses or people
Equity is the amount contributed by the owners and profit generated by the business

9
Q

State the accounting equation?

A

Total assets = Total liability + Total equity