Understanding key financial terms:

• Assets can be either tangible or intangible
• Match the asset type with its definition:

  Tangible Assets ↔️ Physical possessions with measurable value

  Intangible Assets ↔️ Non-physical assets providing value

  Current Assets ↔️ Short-term assets used within one year

  Fixed Assets ↔️ Long-term assets used for more than one year
• What are assets in business terms?

  Resources owned by a business
• What is the accounting equation?

  Assets = Liabilities + Owner's Equity
• What are current liabilities?

  Debts due within one year
• What does the accounting equation state about a company's assets?

  They must equal liabilities plus owner's equity
• Owner's equity is the residual claim on the assets of a business after deducting its liabilities
• The accounting equation is fundamental for maintaining balance
• Profit is calculated by subtracting expenses from revenue
• What are the two primary types of capital available to a business?

  Equity and debt capital
• What are assets in a business context?

  Resources with future value
• What are liabilities in a business context?

  Financial obligations or debts
• What does owner's equity represent in financial terms?

  Net worth of the business
• What is revenue in a business context?

  Income from selling goods
• Understanding revenue and expenses is crucial for determining the profitability of a business.
• Match the scenario with the correct formula:

  1️⃣ Profit

  2️⃣ $\text{Profit} =$$\text{Revenue} - \text{Expenses}$

  3️⃣ Loss

  4️⃣ $\text{Loss} =$$\text{Expenses} - \text{Revenue}$
• What is debt capital obtained from?

  Banks or lending institutions
• Accounts payable is an example of a current liability.


  True
• What are examples of intangible assets?

  Patents, copyrights, trademarks
• Non-current liabilities are long-term debts due after one year.

  True
• The accounting equation is fundamental for maintaining balance in financial accounting.


  True
• Assets are resources owned by the business with future economic value
• Profit is the amount of money a business earns after subtracting its expenses from its revenue
• The formula for profit is Revenue minus Expenses
• The two primary types of capital are equity capital and debt capital.


  True
• Equity financing involves raising capital by selling ownership shares
• Current assets are resources expected to be converted to cash or used within one year
• Non-current liabilities extend beyond one year and typically fund significant investments.

  True
• Owner's equity represents the net worth of a business.


  True
• Liabilities are the opposite of assets and reduce the net worth of a business.


  True
• Steps to balance the accounting equation:

  1️⃣ Identify the total assets

  2️⃣ Identify the total liabilities

  3️⃣ Calculate owner's equity using the equation

  4️⃣ Ensure assets equal liabilities plus owner's equity
• What is the accounting equation?

  Assets = Liabilities + Owner's Equity
• What does the accounting equation state about a company's assets?

  Assets = Liabilities + Equity
• Understanding expenses is crucial for determining a business's profitability.


  True
• Order the steps to determine profit or loss in a business:

  1️⃣ Calculate total revenue

  2️⃣ Calculate total expenses

  3️⃣ Subtract expenses from revenue

  4️⃣ Determine profit or loss
• Debt capital must be repaid with interest over a specified period.

  True
• Intangible assets are non-physical assets that provide value.

  True
• Effective liability management is crucial for a business's financial stability.


  True
• Owner's equity indicates the amount owners would receive if all debts were paid off.

  True
• If a business's expenses exceed its revenue, it results in a loss.


  True