C213 Topic 3: The Balance Sheet UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Other Assets - CORRECT ANSWER Long-term assets that are not suitable for reporting
under any of the previous classifications
Accounts Payable - CORRECT ANSWER The flip side of accounts receivable—when one
company sells on credit, creating for itself an account receivable, the company on the other side
of the transaction is buying on credit, creating an account payable.
Accounts Receivable - CORRECT ANSWER Amounts owed to a business by its credit
customers and are usually collected in cash within 10 to 60 days.
Accumulated Depreciation - CORRECT ANSWER Reflects the wear and tear, or
depreciation, of these items since they were originally purchased.
Accumulated Other Comprehensive Income - CORRECT ANSWER The grouped together
and reported changes which companies experience increases and decreases in equity each year
because of the movement of market prices or exchange rates.
Additional Paid-in Capital - CORRECT ANSWER Invested by stockholders that exceeds the
par value of the issued shares.
Asset - CORRECT ANSWER Probable future economic benefit obtained or controlled by a
particular entity as a result of past transactions or events.
Asset Mix - CORRECT ANSWER The proportion of total assets in each asset category, is
determined to a large degree by the industry in which the company operates.
, Balance Sheet - CORRECT ANSWER A listing of an organization's assets and of its
liabilities at a certain time.
Capital Lease Obligations - CORRECT ANSWER A long-term liability in the balance sheet.
Cash - CORRECT ANSWER Coins and currency as well as the balances in company
checking and savings accounts.
Common Stock - CORRECT ANSWER Stockholders' equity investment.
Current Assets - CORRECT ANSWER Cash, accounts receivable, and inventory.
Current Liabilities - CORRECT ANSWER Those obligations expected to be paid within one
year, the most common being accounts payable.
Current Portion of Long-term Debt - CORRECT ANSWER Some liabilities, such as
mortgages, are payable in equal monthly installments over a specified number of years. The
portion of these liabilities that is payable within 12 months from the balance sheet date.
Deferred Income Tax Liability - CORRECT ANSWER The income tax expected to be paid in
future years on income that has already been reported in the income statement but which,
because of the tax law, has not yet been taxed.
Derivative - CORRECT ANSWER A financial instrument, such as an option or a future, that
derives its value from the movement of a price, an exchange rate, or an interest rate associated
with some other item.
Disclosure - CORRECT ANSWER Convey the details in a narrative note without ever
including anything in the financial statements themselves.
ACTUAL Exam Questions and CORRECT
Answers
Other Assets - CORRECT ANSWER Long-term assets that are not suitable for reporting
under any of the previous classifications
Accounts Payable - CORRECT ANSWER The flip side of accounts receivable—when one
company sells on credit, creating for itself an account receivable, the company on the other side
of the transaction is buying on credit, creating an account payable.
Accounts Receivable - CORRECT ANSWER Amounts owed to a business by its credit
customers and are usually collected in cash within 10 to 60 days.
Accumulated Depreciation - CORRECT ANSWER Reflects the wear and tear, or
depreciation, of these items since they were originally purchased.
Accumulated Other Comprehensive Income - CORRECT ANSWER The grouped together
and reported changes which companies experience increases and decreases in equity each year
because of the movement of market prices or exchange rates.
Additional Paid-in Capital - CORRECT ANSWER Invested by stockholders that exceeds the
par value of the issued shares.
Asset - CORRECT ANSWER Probable future economic benefit obtained or controlled by a
particular entity as a result of past transactions or events.
Asset Mix - CORRECT ANSWER The proportion of total assets in each asset category, is
determined to a large degree by the industry in which the company operates.
, Balance Sheet - CORRECT ANSWER A listing of an organization's assets and of its
liabilities at a certain time.
Capital Lease Obligations - CORRECT ANSWER A long-term liability in the balance sheet.
Cash - CORRECT ANSWER Coins and currency as well as the balances in company
checking and savings accounts.
Common Stock - CORRECT ANSWER Stockholders' equity investment.
Current Assets - CORRECT ANSWER Cash, accounts receivable, and inventory.
Current Liabilities - CORRECT ANSWER Those obligations expected to be paid within one
year, the most common being accounts payable.
Current Portion of Long-term Debt - CORRECT ANSWER Some liabilities, such as
mortgages, are payable in equal monthly installments over a specified number of years. The
portion of these liabilities that is payable within 12 months from the balance sheet date.
Deferred Income Tax Liability - CORRECT ANSWER The income tax expected to be paid in
future years on income that has already been reported in the income statement but which,
because of the tax law, has not yet been taxed.
Derivative - CORRECT ANSWER A financial instrument, such as an option or a future, that
derives its value from the movement of a price, an exchange rate, or an interest rate associated
with some other item.
Disclosure - CORRECT ANSWER Convey the details in a narrative note without ever
including anything in the financial statements themselves.
