Assets/Liabilities/
capital 1
capital 1
Define Assets
Items of value that are owned by the business. Properties /Possessions
Define Liabilities
Debts are obligations of the bussiness. Items the business owes.
Define Capital
Refers to money and other assets used to start the business it can also be additional money that was injected into the business.
Office equipment will be classified as
Asset
johny owes us money for Goods Johny will be treated as?
assets
who are debtors?
Debtors are those persons who owes the business money for goods that were sold to them on credit
debtors are considered as
assets
inventory is considered as?
asset
Identify 3 users of Accounting information
owners, investors, government, lenders or financial institutions and credit suppliers
we owe Jude for goods
liability
Who are creditors
suppliers who the business owes for goods bought on credit
state the 3 categories into which items of Businesses fall
Assets, liabilities and capital
What is the accounting equation?
Assets = liabilities+capital
Using the accounting equation how do we calculate capital
C=A-L
why would financial institutions or lenders need financial information?
To help them determine whether or not they should lend the business money.