IB Business Management - 3.4 Balance Sheets - Quiz

What is the primary purpose of a balance sheet?

• To show the company’s profitability

• To provide a snapshot of a company’s financial position at a specific point in time

• To record the company’s revenue

• To calculate the company’s future growth

Net Assets are calculated by what formula?

• Non-Current Assets + Current Assets

• Revenue = Expenses + Profits

• Total Assets - Total Liabilities

• Current Assets - Current Liabilities

Which of the following is considered a current asset?

• Equipment

• Bank loan

• Stock/Inventory

• Retained earnings

Which of the following would be classified as a non-current liability?

• Trade Creditors (accounts payable)

• Bank loan due in 6 months

• Mortgage payable

• Wages payable

What is the correct classification for Property on the balance sheet?

• Current asset

• Non-current asset

• Current liability

• Non-current liability

Which of the following is an example of a current liability?

• Long-term debt

• Trade Creditors (accounts payable)

• Retained earnings

• Buildings

What is the purpose of the "equity" section of a balance sheet?

• To report the value of assets owned by the business

• To show the claims creditors have on the business’s assets

• To show the business’s share/owners capital and retained earnings

• To list all liabilities

Which of the following is considered a non-current asset?

• Cash

• Inventory

• Equipment

• Debtors

What is the meaning of “current liabilities” in the context of a balance sheet?

• Liabilities that are due in more than one year

• Liabilities that are due within a year

• Liabilities with interest attached

• Liabilities that are related to operational expenses

Retained earnings are part of which section of the balance sheet?

• Liabilities

• Non-current Assets

• Equity

• Current Assets