Unit 2 : Accouting equation

*Asset: is something valuable which aa business owns and has the use of.

+Current assets: are expected to be converted into cash within one year.

Ex: Cash, items owned by the business....

+Non-current assets: are acquired for long-tearm use within the business. They are usually valued at cost less depreciation.

Ex:+Tangible assets: land, building, machinery...

+Intagible : patents, copyrights, goodwill....

*Liability: is something which is owned to somebody else. Liability is the accounting term for the debts of a business.

+Current liabilities: are debts of the business that must be paid within a fairly short of time (1 year).

+Non-current liabilities: are debts which are not payable within the short term and so any liabilities which is not current must be non-current.

Assets = capital + liabilities( equal =, plus and +, less -minus -, diveided by /)

*Trade acount payable and receivable:

+Payable:

Creditor is a person to whom a business owes money.

A trade account payable is a liability of a business.

+Receivable:

A customer who buys goods without payig cash for them straight away is  a debtor.

A trade acount receivable is an assets of a business.