FA1 Section - Introduction to business and recording transactions - Assets, liabilities and capital

5 important questions on FA1 Section - Introduction to business and recording transactions - Assets, liabilities and capital

  • What are assets?
  • What [2] types of assets exist? 

An asset is a present economic resource controlled by a business as a result of something that happened in the past.
  • Current assets
  • Non-current assets

  • What are current assets?
  • Give [4] examples

Asset expected to be used up, sold or collected in a short period of time.
  • Inventory
  • Money owed by customers
  • Money in the bank
  • Cash 

  • What are non-currents assets?
  • Give [4] examples

Assets that the business expects to continue using for a number of years in the business.
  • equipment
  • vehicles
  • furniture
  • buildings 
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What is a liability?


Owed by the companyObligation to give an economic resource to someone as a result of something that happened in the past.
  • Overdrawn bank balance
  • bank loan
  • business credit card amount outstanding
  • amounts owed to suppliers
  • taxation

What is a current liability and what is a non-current liability?

Current liability
items due within 12 months (fe. overdrawn bank balance)

non-current liability
Money owed to suppliers (fe. long term bank loan)

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