Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 15 - No. 5)
Which of the following are true regarding the components of the accounting equation?
Assets are listed in order of how long they will stay in the business.
Current assets are those which will be used quickly.
Liabilities consist of those that are owed to others.
Equity is the assets owned by the business.
Explanation
Assets are listed according to how long they will be in the business. Current assets will be used quickly, and liabilities are owed to others. Equity represents the owner's stake in the business.
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