Question

1 pts

Bobby is a skilled baker who worked for several years in a patisserie in Paris. On returning to Melbourne in 2016, she decided to open her own business, Bobby’s Bakery, to sell her unique pastries. Her ultimate goal is to franchise Bobby’s Bakery to fund her early retirement.

Refer to the balance sheet for Bobby’s Bakery

Bobby uses the equation [assets-liabilities=owner’s equity] to calculate the overall equity of the business.

What are Bobby’s assets?

Group of answer choices

Cash, bank loan, inventory

Cash, inventory, equipment

Equipment, cash, wages

Cash, debt, equipment

Answer 1

Sol. Assets are the resources owned by the business with the expectation that it provides the future benefits.

Current and non-current assets are the types of assets.

The correct answer is:

Bobby's assets are cash, inventory, equipment.

Cash is the current asset.

Inventory is the current asset.

Equipment is the non-current assets.

Reason behind the incorrect options are as follow:

Bank loan is the liability so it will be not included in assets.

Therefore, the option cash, bank loan, inventory is incorrect.

Wages are the expenses that will be paid by the company to its labor.

Therefore, the option equipment, cash, wages is incorrect.

Debt is the liability that the company owes to pay.

Therefore, the option cash, debt, equipment is incorrect.