Balance Sheet
Self Test
Self Test
Click the “Check Your Answer” box below each problem to reveal the correct answer and explanation.
a. possible future economic benefit as a result of a past transaction that is owned or controlled
b. probable future economic benefit as a result of a past transaction that is owned or controlled
c. resources that are projected to give future benefit
d. the use of a future economic resource
Answer
a. possible future use of an economic benefit as a result of a past transaction
b. probable future use of an economic benefit as a result of a past transaction
c. resources that are projected to be obtained in the future to be used to pay future obligations
d. a future economic resource
Answer
a. largest amount to smallest
b. liquidity
c. date of when they were acquired
d. importance
Answer
a. prepaid expenses
b. accrued expenses
c. accounts payable
d. retained earnings
Answer
a. decrease assets
b. increase liabilities
c. increase expenses
d. have a negative effect on retained earnings
Answer
a. current assets
b. current liabilities
c. intangible liabilities
d. intangible assets
Answer
a. it is listed in the order of liquidity
b. it reports assets at historical cost
c. it subtotals categories
d. different companies use different formats for the balance sheet
Answer
Subtotaling categories is helpful.
a. land
b. patent
c. supplies
d. accounts payable
Answer
a. salaries payable
b. notes payable
c. bonds payable
d. taxes payable
Answer
a. the fiscal year ends
b. cash is collected for inventory sold
c. payment is made for goods purchased
d. the calendar year ends
Answer
a. within 2 years or less
b. within 30 days or less
c. within 1 year or less
d. at the time of purchase
Answer
a. supplies
b. notes receivable to be collected in 2 years
c. inventory
d. investments held for 6 months
Answer
a. current assets
b. long term assets
c. property, plant, and equipment
d. intangible assets
Answer
a. current liability
b. equity
c. property, plant, equipment
d. intangible asset
Answer
a. cash plus retained earnings
b. common stock plus additional paid in capital
c. common stock less dividends paid
d. total stockholders equity
Answer
Retained earnings are generated by company operations and are not received from stockholders.
a. material errors made by the accountants
b. material subsequent events
c. the cost of purchasing one piece of equipment
d. significant accounting policies
Answer
a. occurs before year end
b. is any event that occurs after year end
c. occurs before the financial statements are issued and after year end
d. occurs after the financial statements are issued and before year end
Answer
a. the amount of the transaction
b. the intent when recording the transaction
c. the accounts impacted by the transaction
d. the time period the transaction occurs
Answer
a. management
b. auditors
c. shareholders
d. chief financial officer
Answer
a. qualified
b. unqualified
c. explanatory
d. none of the above