Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
If the total liabilities of a company are 2 million dollars, and total assets are 5 million dollars, how much is shareholder equity?
3 million dollars. Shareholder equity is the difference between total assets and total liabilities. When creating a balance sheet, however, you must include shareholder equity with liabilities.
2.
Which of the following is not a current asset?
Stock. Stock is not a current asset. On the balance sheet, it is a liability.
3.
How long must the useful life of an asset be for it to be treated as a fixed asset?
More than one year. If its useful life is more than one year, an asset will be considered fixed.
4.
Shareholder equity is the sum of the companys assets.
False. The value of assets remaining after all the liabilities have been accounted for belongs to the shareholders.
5.
Balance sheets balance _______.
Assets with liabilities. Equity, debt, taxes, and income are all included in assets and liabilities.
6.
On the balance sheet, plants and machinery are included under _______.
Assets. Since they provide economic benefit to a company, they are assets.
7.
Current liabilities are those that are paid ______.
Within one year. This is the accepted time limit.
8.
Balance sheets provide information on a companys stock performance.
False. Balance sheets provide financial information, but not stock performance information.
