|REAL EXAM COMPLETE QUESTIONS AND ANSWERS | 100% RATED CORRECT |
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1. is a listing of an organization's assets and of its liabilities at a certain time.: balance sheet
2. difference between assets and liabilities is called: Equity
3. can be thought of as the amount of the assets that the owners of the organization can really call their own, the
amount that would be left if all the liabilities were paid off.: Equity
4. basic accounting equation:: Assets = Liabilities + Owner's Equity
5. can be used to evaluate a company's financial position by comparing the company's resources with its
obligations.: balance sheet
6. are economic resources that are owned or controlled by a company.: Assets 7. Cash-Coins, currency, checks. The
amount in a company's checking account.
Accounts Receivable-Amounts owed to a company that sold goods or services to a customer on credit. If you
have a balance on your credit card, the credit card company classifies the amount you owe them as an account
receivable.
Inventory-Items that are purchased or manufactured by a company and are resold. The items you see on the shelves
in Walmart are considered by Walmart as inventory.
Buildings-Structures used in the operations of a business. The physical store itself is classified by Walmart as a
building.: Examples of Assets
,8. are the economic obligations of a company and include primarily the money or services that the company
owes its creditors. ___________often supply the funds a company uses to acquire its assets.: Liabilities
9. Accounts Payable-Amount owed as a result of the purchase of goods and services on credit. The amount
owed by a company for inventory that was purchased on credit and has not been paid for yet.
Taxes Payable-Amount owed to federal and state governments resulting from the application of tax laws. Corporate
income tax or employment taxes owed but not yet paid.
Mortgage Payable-Amount owed relating to the purchase of property. The loan associated with the purchase of a
home or building.
Unearned Revenue-Amount owed in services or product (not money) to a customer who paid in advance.
Magazines a company owes a customer who bought a 12-month magazine subscription.: Examples of Liabilities
10. The residual interest in the assets that remain of an entity after its liabilities have been deducted is the:
owners' equity
11. is often referred to as net assets because equity also equals assets minus liabilities.: owners' equity
12. Capital Stock-The amount given by shareholders to purchase shares of stock from a company. A company
sells shares of stock to the public. The amount of cash the company receives is classified as capital stock.
Retained Earnings-Earnings that are retained in the business If a company reports net income for the year of
$100,000 and reinvests the entire amount in the business (does not distribute dividends to its owners), retained
earnings increases by $100,000.: Example of owner's equity
13. The owners of a corporation are called:: stockholders or shareholders 14. The owners' equity section of a
corporate balance sheet is sometimes referred to as: stockholders' equity
15. Payments made by a company to owners of the company stock.: dividends
, 16. cash, accounts receivable, and inventory.: current assets
17. are amounts owed to a business by its credit customers and are usually collected in cash within 10 to 60 days.:
Accounts receivable
18. is the name given to goods held for sale in the normal course of business.: Inventory
19. are payments in advance for business expenses.: prepaid expenses
20. are normally listed in the balance sheet before long-term assets.: Current assets
21. Assets that you expect to still be around next year when you prepare the balance sheet again.: long-term
investments
22. land, buildings, machinery, tools, furniture, fixtures, and vehicles used by a company in conducting its business
activities.: Property, plant, and equipment (PPE)
23. which reflects the wear and tear (depreciation) of these items since they were originally purchased.:
accumulated depreciation
24. are assets that have no physical or tangible characteristics. They are agreements, contracts, or rights that
provide economic benefits to a company by permitting the use of a certain production process, trade name, or
similar item.: Intangible assets
25. are those obligations expected to be paid within one year. The most common of these is accounts payable.:
Current liabilities
26 are formal, interest-bearing loans that are expected to be paid back within one year.: Short-term loans payable
27. the difference between assets and liabilities is most often referred to as: stockholders' equity
28. reflects the total amount invested by stockholders that exceeds the par value of the issued shares.:
additional paid-in capital 29. Stockholder's equity investment: Preferred stock
30. the repurchased shares when a company buys back its own shares.: treasury stock
31. What is a classified balance sheet?: A balance sheet that distinguishes between current and long-term assets