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1.
If you want to learn the kinds of assets a company is buying, you can find them on the balance sheet.
True. The balance sheet will identify assets that the company has bought.
2.
A companys assets are paid for with liabilities and shareholder equity.
True. Liabilities (debt) and shareholder equity (stock) finance the purchase of assets.
3.
Current liabilities are those that are paid ______.
Within one year. This is the accepted time limit.
4.
The company E-Publisher.com owns exclusive rights to its material. This copyright is an asset.
True. Copyright is an intangible asset.
5.
Shareholder equity is the value of stock on the market.
False. Shareholder equity is the amount of capital invested by the owners.
6.
Steve, a beginning investor, wants to see the balance sheet of his chosen company show a huge profit. If the balance sheet is prepared correctly, it is possible that it will show a profit during a good year.
False. One of the cardinal rules of balance sheets is that assets and liabilities balance each other. Steve is looking at the wrong piece of data.
7.
How do you know when a document is a balance sheet?
Its assets equal its liabilities and shareholder equity. To be a balance sheet, all of the assets must equal all of the liabilities and shareholder equity.
8.
Current assets are called "current" because they are usually converted to cash _______.
Within one year. This is the defining quality of current assets.
