Accounting Equation Flashcards

Flashcards for key vocabulary and concepts related to the accounting equation.

Assets

Items of value owned or controlled by a business to carry out its business activity and generate future benefits.

Non-Current Assets

Assets not easily converted to cash or not expected to be converted within one year.

Current Assets

Assets that can be easily converted into cash within one year.

Loan to Staff

When an employee borrows from the business and needs to pay it back.

Office Equipment

Printer, fax machine, cash register, bar code scanner, computer, laptop, telephone, photocopier machine, television, DVD player and refrigerator etc.

Office Furniture

Table, chair, sofa, office desk, display shelf, cabinets, cupboard and book shelf etc.

Fixtures and Fittings

Shop fitting, lighting, decoration, accessory, air-conditioner and carpet etc.

Machinery

Cutting machine, drilling machine, baking machine, sewing machine, factory machine etc.

Land and Buildings

Land, building, premise, office, factory and warehouse etc.

Motor Vehicle

Delivery van, truck, motor car, motorcycle and motor van etc.

Trade Receivables

Amounts owed by customers.

Liabilities

Amounts owed by the business to external parties for goods supplied or expenses owed.

Non-Current Liabilities

Debts of the business which has a repayment period of more than one year.

Current Liabilities

Short-term debts that are settled within one year.

Trade Payable

Amounts owed to suppliers/vendors.

Owner’s Equity

The amount contributed by the owner and the profit generated by the business; the difference between assets and liabilities.

Capital

Amount of the resources contributed by the owner to the business.

Drawings

Assets taken from the business by its owner for personal use

Accounting Equation

Assets = Liabilities + Owner's Equity