FI-093 Posttest

Which of the following is an example of a current asset:

Checking account

The footnotes section of the balance sheet may contain

information about accounting policies.

Owner's equity may also be called

net worth.

Which user studies a balance sheet to determine if the company will provide a good rate of return?

Investor

Which of the following is a true statement regarding a company's book value as listed on the balance sheet:

It is not the same thing as fair market value.

Items of value are listed under which of the following components of the balance sheet:

Assets

Which of the following is the accounting equation:

Assets = Liabilities + Owner's Equity

The balance sheet is sometimes called the

statement of financial position.

Which of the following is a true statement regarding fixed assets:

They take longer than a year to convert into cash.

A balance sheet shows

how much money a company owes.

A business's managers often study a series of past balance sheets to

identify and analyze financial trends within the company.

Which of the following is an example of a liability:

Accounts payable

Which of the following is an example of a short-term liability:

Accounts payable

Which user studies a balance sheet to determine a company's creditworthiness?

Bank

Which of the following is an example of an asset:

Cash

Which of the following is an example of a long-term liability:

Mortgage

The balance sheet has a close relationship with the company's

income statement.

All of a business's assets come from two sources—borrowing and/or

investment.

When a fixed asset depreciates, it

decreases in value on the balance sheet.

The portion of a business's value that belongs to its owners or stockholders is known as

equity.