Long Quiz (Balance Sheet & Income Statement)

If an entity has notes payable over a 3-year period, that is a long-term liability but if the notes payments that are due during the current year are considered the current portion of long-term debt.

Obligations that are due and payable less than a year are current assets.

A person who owns a business with many branches can prepare a single set of financial statements.

Small businesses, such as sari-sari stores have little or no use of accounting.

Permanent accounts are real accounts.

Contra Assets accounts are nominal accounts.

Current assets and current liabilities are also called short-term assets and short-term liabilities.

Assets that cannot be realized (collected, sold, used upon year after year-end date is non-current.

For accrual, this is what the owners of an entity have invested in an enterprise. It represents what the business owes to its owners.

Fixed asset when it expects to realize the asset or intends to sell or consume it, in its normal operating cycle; it holds the asset primarily for the purpose of trading.