Accounting Excel Test Practise

Asset

A resource controlled by the business that will provide future economic benefits

Liability

A present obligation to transfer resources to another party in the future

Owner’s Equity

The owner's claim on the assets of the business (Assets − Liabilities)

Revenue

An inflow of economic benefits that increases owner's equity, earned from business activities

Expense

An outflow of economic benefits incurred in earning revenue, which decreases owner's equity

Cost of sales

The cost price of the inventory that has been sold

Cost of sales

The cost price of the inventory that has been sold

Gross profit

Sales revenue less cost of sales — the profit made from selling inventory before other revenue and expenses

Drawings

Assets taken from the business by the owner for personal use; reduces owner's equity

Current

Expected to be used or settled within the next 12 months

Non-current

Expected to be used or settled after more than 12 months