**Identifying Assets, Liabilities, and Capital**Below is a list of items that may categorize as assets, liabilities, or capital in a business context. Review the list to determine the appropriate classification for each item.- Vehicle- Shop fittings- Cash at bank- Bank loan- Owner's investment in the business- Inventory- Trade receivables- Bank overdraft- Trade payables- Machinery- Cash in hand- Equipment- Amounts owing to suppliers- Furniture- Land- Loan from a friend- Value of owner's stake in the business- Amounts owed by customers- Cash at bank- FittingsThis exercise helps in understanding the financial structure of a business by differentiating between what the business owns (assets), what it owes (liabilities), and the owner's equity in the business (capital).

Lets understand the basics. Financial statement is divided into three major portions which are, (1)…

. Identifying assets, liabilities and capital. Here is a list of assets and liabilities and references to capital. Read through the list, and then identify which iter are assets, liabilities, capital. • Vehicle • Shop fittings • Cash at bank • Bank loan • Owners investment in the business Inventory • Trade receivables

. Identifying assets, liabilities and capital. Here is a list of assets and liabilities and references to capital. Read through the list, and then identify which iter are assets, liabilities, capital. • Vehicle • Shop fittings • Cash at bank • Bank loan • Owners investment in the business Inventory • Trade receivables

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Management Information Systems

While undertaking any business decisions, data is the most important aspect. An information system (IS) is a set of data, computing devices and management methods that support routine company operations. A management information system (MIS) is a specific subset of IS.

Question

**Identifying Assets, Liabilities, and Capital**

Below is a list of items that may categorize as assets, liabilities, or capital in a business context. Review the list to determine the appropriate classification for each item.

- Vehicle
- Shop fittings
- Cash at bank
- Bank loan
- Owner's investment in the business
- Inventory
- Trade receivables
- Bank overdraft
- Trade payables
- Machinery
- Cash in hand
- Equipment
- Amounts owing to suppliers
- Furniture
- Land
- Loan from a friend
- Value of owner's stake in the business
- Amounts owed by customers
- Cash at bank
- Fittings

This exercise helps in understanding the financial structure of a business by differentiating between what the business owns (assets), what it owes (liabilities), and the owner's equity in the business (capital).

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