Question

Match the following items:

• A. Asset
• B. Income
• C. Liability
• D. Expense

Answer 1

Sales of goods are treated as income because they are shown on the income statement as sales.

Direct wages are incurred on the production of goods and is treated as an expense.

A bank loan is a liability for the company because it is a contractual liability to pay on a certain due date.

Goodwill is an intangible fixed asset because it helps to create future profits.