The Balance Sheet

Which one is right?

• Asset = Owner's equity + Liability

• Asset = Owner's equity - Liability

• Asset + Owner's equity = Liability

• Asset + Owner's equity = expense

What is Owner's Equity?

• items of value that a company owns

•  obligations of one company to another

• total value of a company or an individual

• the initial investment in the business as well as any retained earnings which are reinvested in the business

Current Assets are cash or other assets that are expected to be converted to cash within a year

• True

• False

A Liability is

• Something of value that a company owns

• liquid items that can be easily converted into cash

• A debt or financial obligation

Office furniture is classified as:

• Accounts Payable

• Long-Term Liability

• Fixed asset

• Current asset

If Shareholder's Equity is $300 and Assets are $1500, the Liabilities are:

• $1800

• $1200

• $300

• $1500

In a balance sheet, Cash is listed as

• shareholder's equity

• liabilities

• current assets

• long term assets

In a balance sheet, Bank Loans are categorized as

• assets

• liabilities

• shareholder's equity

• none of the above

Plant and Machinery are categorized as

• current assets

• fixed assets

• current liabilities

• non current liabilities

What is accounts receivable?

• The amount of goods that a business plans to sell soon
• a resource that a business does not plan to sell within a year
• cash or assets that can be converted into cash in less than a year
• A business sells goods to a customer on credit