WGU D103 Intermediate Acct 1 - The balance
sheet (statement of financial position) Exam |
Questions and Answers | Verified Solutions | 2026
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Terms in this set (22)
The way FASB says to structure the Business
balance sheet Operating assets and liabilities
Investing assets and liabilities
Financing
Financing assets
Financing liabilities
Income Taxes
Discontinued Operations
Equity
Contra accounts are subtracted from the balance sheet account
Adjunct accounts are added to the balance sheet account
Liquidity amount of time that is expected to elapse until an
asset is realized or otherwise converted into cash
or until a liability has to be paid.
, Solvency refers to the ability of a company to pay its debts
as they mature. For example, when a company
carries a high level of long-term debt relative to
assets, it has lower solvency than a similar company
with a low level of long-term debt. Companies with
higher debt are relatively more risky because they
will need more of their assets to meet their fixed
obligations (interest and principal payments).
financial flexibility, "ability of an enterprise to take effective actions to
alter the amounts and timing of cash flows so it can
respond to unexpected needs and opportunities."3
For example, a company may become so loaded
with debt—so financially inflexible—that it has little
or no sources of cash to finance expansion or to
pay off maturing debt. A company with a high
degree of financial flexibility is better able to
survive bad times, to recover from unexpected
setbacks, and to take advantage of profitable and
unexpected investment opportunities. Generally,
the greater an enterprise's financial flexibility, the
lower its risk of failure.
Balance sheet accounts are That is, balance sheets group together similar items
classified. to arrive at significant subtotals. Furthermore, the
material is arranged so that important relationships
are shown
sheet (statement of financial position) Exam |
Questions and Answers | Verified Solutions | 2026
Edition | Pass Guaranteed
Save
Terms in this set (22)
The way FASB says to structure the Business
balance sheet Operating assets and liabilities
Investing assets and liabilities
Financing
Financing assets
Financing liabilities
Income Taxes
Discontinued Operations
Equity
Contra accounts are subtracted from the balance sheet account
Adjunct accounts are added to the balance sheet account
Liquidity amount of time that is expected to elapse until an
asset is realized or otherwise converted into cash
or until a liability has to be paid.
, Solvency refers to the ability of a company to pay its debts
as they mature. For example, when a company
carries a high level of long-term debt relative to
assets, it has lower solvency than a similar company
with a low level of long-term debt. Companies with
higher debt are relatively more risky because they
will need more of their assets to meet their fixed
obligations (interest and principal payments).
financial flexibility, "ability of an enterprise to take effective actions to
alter the amounts and timing of cash flows so it can
respond to unexpected needs and opportunities."3
For example, a company may become so loaded
with debt—so financially inflexible—that it has little
or no sources of cash to finance expansion or to
pay off maturing debt. A company with a high
degree of financial flexibility is better able to
survive bad times, to recover from unexpected
setbacks, and to take advantage of profitable and
unexpected investment opportunities. Generally,
the greater an enterprise's financial flexibility, the
lower its risk of failure.
Balance sheet accounts are That is, balance sheets group together similar items
classified. to arrive at significant subtotals. Furthermore, the
material is arranged so that important relationships
are shown
