Distinction Between Assets And Liabilities - SS1 Accounting Past Questions and Answers - page 1
1
What are assets on a balance sheet?
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A
Things that a company owns or controls
B
Financial obligations that a company owes to others
C
Debts that must be paid back in the future
D
Resources that a company can use to generate income
2
What are liabilities on a balance sheet?
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A
Things that a company owns or controls
B
Financial obligations that a company owes to others
C
Debts that must be paid back in the future
D
Resources that a company can use to generate income
3
Which of the following is an example of an asset on a balance sheet?
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A
A loan that a company owes to a bank
B
Rent that a company owes to its landlord
C
Inventory that a company has in stock
D
Salaries that a company owes to its employees
4
Which of the following is an example of a liability on a balance sheet?
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A
Equipment that a company owns
B
Cash that a company has in the bank
C
Taxes that a company owes to the government
D
Investments that a company has made
5
What is the difference between assets and liabilities on a balance sheet?
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A
Assets represent what a company owes, while liabilities represent what a company owns
B
Assets and liabilities are the same things
C
Assets represent what a company has, while liabilities represent what a company owes
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D
Liabilities represent what a company has, while assets represent what a company owes
6
Why is it important for a company to have more assets than liabilities?
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7
Give an example of a short-term liability and a long-term liability.
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