TN FBM Test Bank

The balance sheet represents the financial position of ABC Organic Farm for the accounting period.

• for the accounting period.

• for the tax year.

• after deferred income taxes are paid.

• on the date of the balance sheet.

One example of an account receivable for ABC Farm would be

• an unpaid fertilizer bill.

• interest that will be paid when the business makes its next loan payment.

• the unpaid amount for custom work that has been completed for you.

• the amount paid for completed custom work.

Noncurrent assets are sometimes referred to as

• intermediate and long-term assets.

• inventory assets.

• assets that will be sold during the next accounting period.

• assets such as cash, marketable securities, accounts and notes receivable.

Net worth or owner equity refers to the difference between

• total assets and total liabilities.

• total revenue and total expenses.

• total cash income and total cash expenses.

• beginning net worth or owner equity and ending net worth or owner equity.

On a balance sheet, using market values for intermediate and long-term assets, the sources of owner equity (net worth) will include which of the following?

• Contributed capital.

• Retained earnings.

• Valuation equity.

• A and B.

• A, B, and C.

A nine-year loan has a principal balance of $61,574, an annual principal and interest payment of $8,400 due on July 1, and an interest rate of 3% annually. What is the amount of accrued interest for this loan on the 1/1/2016 balance sheet?

• $1,847.22

• $252.12

• $931.20

• $1,049.33

What was the change in working capital for the 2015 accounting period?

• -$510,599

• -$40,786

• $1,087,559

• $536,174

• -$514,224

Which of the following items contributed to a positive change in the 2015 owner equity? (There may be more than one correct answer.)

• Net farm income

• Personal income

• Income taxes

• Change in the market value of capital assets

On the balance sheet, total assets must equal

• total liabilities.

• total assets minus total liabilities.

• total assets minus net worth.

• total liabilities plus net worth.

When comparing cost and market balance sheets, market valuation is best described as

• market value of intermediate and long-term assets minus cost value of intermediate and long-term assets.

• market value of intermediate and long-term assets minus intermediate and long-term liabilities on a cost basis.

• market value of 2015 intermediate and long-term assets minus cost value of 2016 intermediate and long-term assets.

• value of 2016 intermediate and long-term liabilities minus cost value of 2015 intermediate and long-term liabilities.