Firzt 3 exam questions

1. Which of the following items would not fall under the definition of an asset?*

a) Land

b) Machinery

c) Cash

d) Owner’s equity

e) Debtors

2. Which one of the following items would fall under the definition of a liability?*

a) Cash

b) Debtors

c) Owner’s equity

d) Tax owed

e) None of the above

3. Which of the following statements are false?*

a) A liability is a debt for your business.

b) Debtors are a debt for your business.

c) The accounting equation shows how much of your assets belong to the owner, and how much ‘belong’ to people outside the business.

d) If you cannot work out a value for an item that will bring you future benefits, then you cannot keep this as an asset in your records.

e) None of the above