Asset: An asset is a resource embodying an economic benefit that is owned and controlled by a business entity. The benefits derived from an asset are generally spread over the useful life of the asset. Assets can be tangible or intangible. In accounting, an asset is a real account and always shows debit balance. Liability: Liability is the obligation arising out of carrying business transactions that needs to be settled within a specified period of time. It is the sacrifice of economic benefits in future as the result of an obligation. Liabilities are classified as long term and short term. Liabilities represent real account and always show credit balance. Equity: Equity represents the ownership value of the business. In other words, the difference between assets and liabilities of a business is called equity. It is the net asset of an entity. Revenue: Revenue is the income earned by a business from its normal course of business by selling its products or services. It is also called sales or turnover. In accounting revenue, it is a nominal account and represents the credit balance. Expense: Expense is the money spent in a business effort to generate revenue. It is the outflow of resources for an item, service or a cost. Expense is a nominal account and always shows the debit balance. To determine: The assets, liabilities, equity, revenue and expense accounts from the list of items

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Chapter 2, Problem 3QS

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Concept Introduction:

Asset:

An asset is a resource embodying an economic benefit that is owned and controlled by a business entity. The benefits derived from an asset are generally spread over the useful life of the asset. Assets can be tangible or intangible. In accounting, an asset is a real account and always shows debit balance.

Liability:

Liability is the obligation arising out of carrying business transactions that needs to be settled within a specified period of time. It is the sacrifice of economic benefits in future as the result of an obligation. Liabilities are classified as long term and short term. Liabilities represent real account and always show credit balance.

Equity:

Equity represents the ownership value of the business. In other words, the difference between assets and liabilities of a business is called equity. It is the net asset of an entity.

Revenue:

Revenue is the income earned by a business from its normal course of business by selling its products or services. It is also called sales or turnover. In accounting revenue, it is a nominal account and represents the credit balance.

Expense:

Expense is the money spent in a business effort to generate revenue. It is the outflow of resources for an item, service or a cost. Expense is a nominal account and always shows the debit balance.

To determine: The assets, liabilities, equity, revenue and expense accounts from the list of items

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