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WorksheetsChapter 4 Personal and Business Balance Sheet
Total questions: 21
Worksheet time: 18mins
Wilder has some assets, liabilities, and owner's equity. Which of the following equations correctly represents John's financial situation?
Asset = Owner's equity + Liability
Asset = Owner's equity - Liability
Asset + Owner's equity = Liability
Asset + Owner's equity = expense
Imagine you are a financial analyst at a company. You are asked to prepare a balance sheet. What would that entail?
Preparing a balance sheet means creating a financial statement that reports the company's assets, liabilities and shareholders' equity at a specific point in time. This provides a basis for computing rates of return and evaluating the company's capital structure.
Preparing a Balance sheet means creating one of the company's core financial sheets that shows their profit and loss.
Mr.W owns a small business with current assets worth $500 and total assets worth $1500. ABC, another small business, has current liabilities of $300 and total liabilities of $800. What is the amount of ABC's owner's equity?
200
700
900
800
John is reviewing his company's financial statements. Which of the following would normally be considered a current liability for his company?
A note payable that is due in two years
Revenue that the company has received in advance but has not yet earned
John's company's building, which is a fixed asset, can be converted to cash really quickly
True
False
Ellarose is considering taking a loan from the bank. This would be considered a
long term liability
a current liability
a fixed asset
a current asset
Diego started a business. He believes that his Assets are equal to his Capital minus his Liabilities. Is this statement correct?
True
False
Imagine you are preparing your personal balance sheet.
A document that provides a snapshot of your financial position at a specific point in time.
A prediction of your future cash inflows and outflows.
The amount you would get if you sold all your assets today.
An asset you acquire with the ultimate goal of making money.
Certificates that function like IOUs—promises to repay a certain amount of money at some future time.
You are planning to manage your finances for the upcoming year. What would you call the document that you will create?
A document that tells your financial position at a specific point in time.
A document that forecasts your future cash inflows and outflows.
A document that tells what something would be worth if you sold it today.
A document that you acquire with the ultimate goal of making money.
A document that functions like IOUs—promises to repay a certain amount of money at some future time.
Imagine you are a financial advisor. One of your clients asks you about the term 'Investment'. How would you explain it to them?
It's a financial statement that tells your financial position at a specific point in time.
It's a forecast of future cash inflows and outflows.
It's what something would be worth if you sold it today.
It's something you acquire with the ultimate goal of making money.
It's certificates that function like IOUs—promises to repay a certain amount of money at some future time.
Imagine you are playing a game of Monopoly and you land on a property. What does this property represent in real-world terms?
A financial statement that tells your financial position at a specific point in time.
A forecast of future cash inflows and outflows
Homes, rental property, farms, and other land
Professionally managed investments that allow investors to pool their money in order to invest in a larger variety of financial assets such as stocks and bonds from many different companies.
Certificates that represent fractional ownership of a firm
Jaylin is planning to create a cash flow statement. This will help him determine how much money he
needs to set aside for his monthly medical expenses this year.
will have left at the end of the year to buy Christmas presents.
receives from his job and other sources over the course of a month.
has spent on groceries this year.
Krystal is trying to understand her assets. Can you match the asset with its correct description?
John's House: liquid asset.
John's Mutual fund: liquid asset.
John's Car: household asset
John's Checking account: investment asset.
Saul is trying to get his finances in order. Which of the following sequences, in the correct order, should he follow to organize his financial life?
Create a financial plan, determine net worth, establish financial
goals.
Create a personal cash flow statement, create a budget, develop a personal balance sheet.
Establish financial goals, create a personal balance sheet, create a personal cash flow statement.
Determine net worth, create a personal cash flow statement, create
a budget.
Imagine you just got your paycheck. According to the 50/30/20 rule, the 30 represents 30% of your income that should be put towards your ___________
Wants
Needs
Savings
Imagine you are a software engineer earning $2,500.00 per month. How much of that income should you ideally allocate towards your basic needs like rent, groceries, and utilities?
$500.00
$750.00
$1,250.00
John has an expense that does NOT change from month to month. What type of expense is this?
Fixed expense
Variable expense
Variable rate
Fixed variable
John has just started his first job and is considering his financial options. Why should he consider saving a portion of his salary?
So he can afford to buy a new car
To have a safety net in case of unexpected expenses
To save up for a down payment on a house in the future
All of the above reasons
Why is the cash flow important for a restaurant business?
To know the available cash for purchasing ingredients and paying salaries
To know if the restaurant is being efficient with its cash
To avoid negative balances and ensure smooth operations
All are correct
Ethan has to pay his monthly bills and repay his car loan. These are examples of ________ in his personal finance?
Assets
Liabilities
Net worth
Pickles
Keshi has assets worth $50000 and liabilities of $20000. What is the difference between Keshi's assets and liabilities?
Net Worth/Wealth
Cash Flow
Income
Expenses
