Finance 101 - Balance Sheet

This means anything that provides or will provide a benefit.

• Net Income

• Equity

• Liability

• Asset

Which of the following may NOT provide cash inflow to the company?

• Payment of liabilities

• Collection from customers

• Sale of company car

• Payment by employee of his loan

In manufacturing, the transfer of work in progress to finished goods affects what balance sheet account:

• Inventories

• Cost of Goods Sold

• Production Machineries and Equipment

• Transfer Price

The fixed assets of a company can be easily converted to immediate cash.

• True

• False

This means an obligation that will require an entity to spend resources.

• Asset

• Liability

• Equity

• Net Income

NMT sells CBUs to NPI on account, payable in 45 days. What is the effect on NMT's cash at the time of sale?

• Decrease

• Increase

• No effect

• Cannot be determined

What is the effect of payment of NPI to NMT in the books of NMT?

• I. Increase in Cash

• II. Decrease in Liability

• III. Decrease in Accounts Receivable

• d) Both I & III

Which of the following is a category, classification, or element of the balance sheet?

• Expenses

• Gains

• Equity

• Losses

Equity is equivalent to the total assets of a company less its liabilities. It is also referred to as:

• Net Revenue

• Net Income

• Net Assets

• Net Liabilities

Assets = Liabilities + Shareholders' Equity

• True

• False