Test Your Knowledge - Balance Sheet

What is the purpose of the balance sheet?

To report a company's financial position at a specific point in time
To show the company's cash flow for the period
To summarize revenue and expenses for a period

Which of the following is NOT a section in the balance sheet?

Assets
Liabilities
Cash flow

Which of the following is classified as a current asset?

Property
Inventory
Land

What is the basic accounting equation represented in the balance sheet?

Assets = Liabilities + Owner's Equity
Assets = Liabilities - Owner's Equity
Assets = Liabilities

What are long-term liabilities?

Obligations that are due within one year
Obligations that are due after more than one year
Payables to suppliers

What is equity in the balance sheet?

The value of the company's assets minus its liabilities
The company's total liabilities
The total cash balance of the company

Which of the following is an example of a non-current asset?

Accounts receivable
Machinery
Inventory

What is the difference between current and non-current liabilities?

Current liabilities are due after more than one year, while non-current liabilities are due within one year
Current liabilities are due within one year, while non-current liabilities are due after more than one year
There is no difference

Which of the following accounts would be classified as a current liability?

Accounts payable
Bonds payable
Common stock

Where would you find the total liabilities and equity on the balance sheet?

At the bottom of the balance sheet
At the top of the balance sheet
In the middle section

Test Your Knowledge - You have 10 questions!