What a business has and owes
Every business has things of value, and owes money to someone. Bookkeeping starts by naming them.
In this room: 3 tasks, 9 questions
- Assets2 questions
- Liabilities and capital4 questions
- The accounting equation3 questions
An asset is something the business owns, or is owed.
- A delivery van
- Money in the bank
- Money that customers owe
If the business owns it, or will receive it, it is an asset.
Answer the questions below
1 more question follows in this task.
A liability is money the business owes to someone else, such as a bank loan or an unpaid supplier bill.
Capital is what the business owes its owner: the money the owner put in, plus any profit left in the business.
Both answer the same question: where did the money come from?
Answer the questions below
3 more questions follow in this task.
Everything a business has was paid for by someone: a lender, a supplier or the owner.
That gives the accounting equation. It is always true.
- Assets
- liabilities plus capital
- Capital
- assets less liabilities
Answer the questions below
2 more questions follow in this task.