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WorksheetsUnderstanding Balance Sheets
Total questions: 15
Worksheet time: 8mins
What is a balance sheet?
A statement of a company's income and expenses
A financial document that shows a company's assets, liabilities, and equity at a specific point in time
A summary of cash flows in and out of a business
A report showing the number of shares owned by stakeholders
Which of the following is considered a current liability?
Bank loan due in 10 years
Wages payable to employees
Land owned by the company
Equipment purchased on credit
What type of liability is due within the next 12 months?
Long-term liability
Current liability
Fixed liability
Non-current liability
Which of the following is a type of asset?
Accounts payable
Equipment
Wages payable
Mortgage payable
Which of the following is NOT considered an asset on the balance sheet?
Cash
Inventory
Accounts payable
Equipment
What is the difference between fixed assets and current assets?
Fixed assets are expected to be used in the business for more than a year; current assets are expected to be used or converted to cash within a year
Fixed assets include cash and accounts receivable; current assets include land and buildings
Fixed assets are long-term loans; current assets are short-term loans
There is no difference
Which of the following is an example of a current asset?
Machinery
Accounts receivable
Land
Trademark
What are the two types of capital listed on the balance sheet?
Fixed and current
Opening and working
Short-term and long-term
Cash and non-cash
What is opening capital?
The capital a business has at the start of a financial year
The amount of capital raised from investors
The profit made from operations
The capital invested by the business owners at the beginning of operations
What is working capital?
The capital used to purchase long-term assets
The difference between current assets and current liabilities
The total value of a company's assets
The amount of capital in the bank account
What is the equation for working capital?
Working Capital = Total Assets - Total Liabilities
Working Capital = Current Assets + Current Liabilities
Working Capital = Current Assets - Current Liabilities
Working Capital = Long-term Debt - Current Assets
What is depreciation in accounting?
The increase in value of an asset over time
The decrease in value of an asset over time
The total value of an asset when purchased
A tax deduction for assets
What is a prepayment in accounting?
Money received before services are rendered
Money paid in advance for goods or services to be received in the future
A payment made for a long-term asset
Payment made to reduce current liabilities
Where should expenses owing go on the balance sheet?
Current assets
Non-current liabilities
Current liabilities
Equity
What is the correct order of the balance sheet?
Current liabilities, current assets, fixed assets, Financed by
Current assets, fixed assets, current liabilities
Fixed assets, current assets, Current liabilities, long term liabilities, and Finacied by
Current assets, current liabilities, fixed assets
