The Right Balance Quiz

A balance sheets shows

• how much money a company owes

• where a company spends its money

• a company's current stock price

• the salaries of individual employees

The balance sheet is sometimes called the

• statement of retained earnings

• income statement

• cash flow statement

• statement of financial position

Which of the following is the accounting equation:

• Owners’ Equity = Assets x Liabilities

• Assets = Liabilities – Owners’ Equity

• Assets = Liabilities + Owners’ Equity

• Liabilities = Owners’ Equity + Assets

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

• mortgage

• fair market value

• income statement

• statement of financial position

Which of the following is an example of an asset:

• Taxes

• wages and salaries

• accounts payable

• cash

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

• They include accounts receivable

• They are purchased for short term use

• They take longer than a year to convert into cash

• They are considered to be very liquid

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

• decreases in value on the balance sheet

• becomescurrent asset

• becomes a liability

• is no longer usable.

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

• Taxes

• Wages/salaries

• Mortgage

• Accounts payable

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

• It determines the company’s actual worth.

• It is calculated by adding assets and owners’ equity.

• It is not the same thing as fair market value.

• It will remain stable for at least a year.

Owners’ equity may also be called

• cash.

• net worth.

• fair market value.

• profit.