ASSIGNMENT 1

John Muli Mweu

PAC University

1. Assets

The organization owns these resources. There are current and fixed assets. The current assets are

those that does not last longer like the cash owned by an organization. On the other hand, fixed

assets are items that last longer like a car, building, and even land among many others.

2. Liabilities and Capital

Liabilities are what an organization owes others. For instance, when a church does credit

purchases of evangelistic materials, it will owe the seller money for the credit purchases, which it

will be required to pay on the agreed date.

Capital, which is equally referred to as equity is defined as owner’s funds. The owners

have invested the resources in the business. It can be the opening capital or the investments done

as the business continue to grow. For example investing Ksh. 10,000 to start business of selling

clothes.

3. Working Capital

This is normally the difference between the organization’s current assets and the current

liabilities. It is mostly used to determine the liquidity of the firm that can enable it run its daily

operations. For example the formula for working capital is given by WC=Current assets –Current

liabilities

4. Designated fund
A charitable tool that specifies which organization or charity to support with their funds. It is a

provision by an organization that allows the company to use a fraction of its financial resources

to help in charity programs. For instance, funds specified to help children in a specific orphanage

in Dandora.