FUNDA 1

Asset is a “resource controlled by the entity as a result of current events and from which future economic benefits are expected to flow to the entity.”

• True

• False

Cash is a resource that an entity can use in the future period to purchase new assets, pay debts and expenses.

• True

• False

Accounts receivables are monetary obligations due from seller to buyer who have purchased goods or services from the seller on credit.

• True

• False

Accounts payable - the total amount of obligations an entity has to pay to suppliers for products and services purchased on cash.

• True

• False

Land is subject to depreciation.

• True

• False

Non-current assets are long term in nature because they are expected to be used and generate economic benefits for more than one accounting period.

• True

• False

“the value of transaction is recorded at the price paid to acquire it, not the prevailing market value or future value”

• Cost Principle

• Matching Principle

Merchandise Inventory is the term for inventories of what type of business industry.

• Manufacturing

• Retail

• Entertainment

Prepaid assets are subject to

• Amortization

• Depreciation

Property, plant and equipment (except land) is subject to

• Amortization

• Depreciation

• Appreciation