QUESTION
Assets and liabilities
Which of the following is an asset according to the definition in the Conceptual Framework?
A Bank
overdraft
B Factory
buildings
C Payables
D
Amounts owed to tax authorities
ANSWER
The correct answer is B, Factory buildings. It is the only one which the business owns rather than owes.
6.1.3 Capital or equity
The amounts invested in a business by the owner are amounts that the business owes to the owner.
This is a special kind of liability, called capital. In a limited liability company, capital usually takes the
form of shares. Share capital is also known as equity. The IASB's Conceptual Framework for Financial
Reporting 2018 defines equity as follows.
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