AgBusiness Module 6 Study Guide

The goal of a business is to increase liabilities over time. True or False?

• True

• False

Which of the following would be considered a current liability?

• an unpaid bill at the feed store

• mortgage on land

• a 5 year loan to buy cattle

• three year loan for a truck

Assets are things that are

• owe money to the bank for

• have a monthly payment for

• invested in

• owned

A liability is

• something you plan to sell

• a loan or debt

• something you plan to buy

• another name for equity

Assets, liabilities and equity are organized into a _______________.

• cash flow statement

• balance sheet

• enterprise budget

• whole budget

The goal of a business is to increase net worth over time.

• True

• False

A business whose asset value is greater than the value of all liabilities is solvent.

• True

• False

Equity is money that is ____________ in the business.

• spent

• saved

• invested

• sold

In double entry accounting in order for the balance sheet to “balance,” all debits values must _________________ all credit values.

• equal

• be greater than

• be less than

The chart of account is made up or managed by

• expense accounts

• sales accounts

• equity accounts

• T accounts