Understanding key financial terms:

• Current assets are assets that can be converted to cash within 1 year.
• Current assets are short-term and easily converted to cash, while fixed assets and intangible assets are long-term investments.


  True
• Current liabilities are debts that must be paid within one year.
• What does equity represent in a business?

  Ownership interest
• Shareholders' Equity is an important measure of a company's net worth and financial health.

  True
• Match the revenue type with its example:

  Rental Revenue ↔️ Landlord renting an apartment

  Interest Revenue ↔️ Bank earning interest on loans
• Operating expenses are ongoing costs required to run the business.
• Operating expenses are ongoing costs required to run the business
• What are expenses incurred by a business used to generate?

  Revenue
• Assets are items of value owned by a business
• Liabilities represent a business's obligations to pay others
• Equity represents the ownership interest in a business
• Revenue is the total income generated by a business from its sales of goods or services
• Match the asset type with its example:

  Fixed Assets ↔️ Buildings

  Intangible Assets ↔️ Patents

  Current Assets ↔️ Cash
• What are liabilities defined as in business terms?

  Obligations to pay others
• Match the liability type with its example:

  Long-Term Liabilities ↔️ Mortgages

  Current Liabilities ↔️ Accounts Payable
• Retained earnings are the accumulated profits of the business that have been reinvested rather than paid out as dividends.
• What is revenue defined as in business terms?

  Total income generated
• Understanding revenue is crucial for evaluating a business's ability to cover expenses and generate profit.


  True
• Match the expense type with its example:

  Cost of Goods Sold ↔️ Raw materials

  Administrative Expenses ↔️ Legal fees

  Operating Expenses ↔️ Rent
• Cost of Goods Sold (COGS) includes the cost of raw materials, direct labor, and shipping
• Match the expense type with its definition:

  Operating Expenses ↔️ Ongoing costs to run the business

  Cost of Goods Sold (COGS) ↔️ Costs related to producing goods

  Administrative Expenses ↔️ Overhead costs for management

  Selling Expenses ↔️ Costs for marketing and sales
• Match the asset type with its definition:

  Current Assets ↔️ Assets converted to cash within 1 year

  Fixed Assets ↔️ Long-term physical assets

  Intangible Assets ↔️ Non-physical assets with long-term benefit
• Accounts Payable are debts a business owes to suppliers for goods or services
• Match the equity component with its definition:

  Share Capital ↔️ Money invested by shareholders

  Retained Earnings ↔️ Accumulated profits reinvested

  Reserves ↔️ Funds set aside for specific purposes
• Match the revenue type with its example:

  Sales Revenue ↔️ A clothing store selling clothes

  Service Revenue ↔️ A hair salon cutting hair

  Rental Revenue ↔️ A landlord renting an apartment

  Interest Revenue ↔️ A bank earning interest on loans
• What does profitability measure in a business?

  Ability to generate profit
• The Debt-to-Equity Ratio measures the proportion of debt compared to equity
• Analyzing expenses in relation to revenue helps businesses improve efficiency
• Understanding profitability terms helps businesses assess their financial performance.


  True
• What are assets defined as in business terms?

  Items of value owned
• Understanding liabilities is crucial to assess a company's financial health, especially when comparing them with assets.

  True
• Match the equity component with its definition:

  Share Capital ↔️ Money invested by shareholders

  Retained Earnings ↔️ Accumulated profits reinvested

  Reserves ↔️ Funds set aside for specific purposes
• Sales revenue is the money earned from selling products.
• What are expenses defined as in business terms?

  Costs incurred to generate revenue
• Expenses are the costs incurred by a business to generate revenue, including operating, cost of goods sold, and administrative expenses.

  True
• Administrative expenses are overhead costs for managing the business.


  True
• Understanding expenses is crucial for evaluating a business's profitability.


  True
• Current assets are short-term and easily converted to cash.


  True
• Understanding liabilities is crucial to assess a company's solvency.


  True