The Accounting Equation

Front

What is an asset?

Back

An asset is a resource that is expected to provide a future benefit to its owner.

Front

Where are business assets reported?

Back

In the case of businesses, assets are reported on the business's balance sheet.

Front

Can you give examples of assets?

Back

Examples include cash at bank, inventories, furniture, equipment, motor vehicles, accounts receivable, buildings, and land.

Front

What is a liability?

Back

Something that is owed to somebody else.

Front

What is another name for a current liability?

Back

Short-term liability

Front

What is another name for a non-current liability?

Back

Long-term liabililty

Front

What is Owner's Equity?

Back

Owner’s Equity represents the value that would be returned to a business’s owners if all of the assets were liquidated and all of the company's debts were paid off.