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Which of the following is an example of an asset?
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3 stepsQuestion 3 - Which of the following is an example of a liability?
A liability is money or value the business must pay to others.
Option A: Money the business owes to suppliers is accounts payable, a liability.
Option B: Equipment the business owes to customers does not make sense; equipment is typically an asset owned by the business.
Option C: Money owed to customers could be a liability (e.g., advances), but A is the standard example.
Option D: Taxes owed is a liability, but A is highlighted.
Question 4 - Which of the following is an example of equity?
Equity is the owner's residual interest in the assets after deducting liabilities (from accounting equation: Assets = Liabilities + Equity).
Options A and B are liabilities.
Options C and D refer to revenue, which increases equity (via profit), but the closest example of equity contribution is earnings/revenue leading to retained earnings.
Question 5 - What is equity?
Equity = Assets - Liabilities, representing net investment by owners after settling debts.
Option A matches this definition.
Option B is incorrect (owes implies liability).
Options C and D describe assets.
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