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The purpose of a balance sheet is to report the ______. - correct answer financial position of a business at a particular point in time The balance sheet of a corporation reports ______. - correct answer only the results o...

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  • November 6, 2024
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  • 2024/2025
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Chapter 1 Terms

The purpose of a balance sheet is to report the ______. - correct answer financial
position of a business at a particular point in time



The balance sheet of a corporation reports ______. - correct answer only the results
of the business' activities



At December 31, Aloe, Inc.'s assets equal $8,000 and stockholders' equity equals $5,000. Liabilities must
equal - correct answer $3,000



Companies typically prepare ______ financial statements each accounting period. - correct answer
4: The four financial statements are the balance sheet, income statement, statement of of stockholders'
equity, and the statement of cash flows.



Which of these headings and accounts would be found on a company's balance sheet? (Check all that
apply.) - correct answer Stockholders' equity

Cash

Retained earnings

Assets

Liabilities



Z Company bought land 20 years ago for $30,000. Over the last 20 years, the value of the land has
doubled. The increase in the land's value ______. - correct answer will not be
reported in Z Company's financial statements - Land is reported on the balance sheet at its original cost.
The increase in the value of the land will only be recorded in the accounting records when the land is
sold, not before then.



A balance sheet shows ______. - correct answer assets, liabilities, and stockholders'
equity at a single point in time - A balance sheet shows balances at a point in time; it does not show the
changes in the balances during the period. The income statement, statement of stockholders' equity and
statement of cash flows explain the changes in the balance sheet during the period.

, Which groups have claims to a business's assets? (Check all that apply.) - correct answer
stockholders

creditors

>The amount of creditors' claim to the business's assets is represented by liabilities and the
stockholders' claims is represented by total stockholders' equity. "Management" consists of employees;
they do not have a claim on the business for anything other than their paychecks.



True or false: The corporation, and not the owners, are viewed as owning the resources and as owing
the debts of the business. - correct answer True - The owners are considered
separate from the business entity. It is the business entity that owns the assets and owes the liabilities.



Which of the following statements are true? (Check all that apply.) - correct answer
Retained earnings increases when a company earns and keeps its profit.



Common stock increases when the company gets cash in exchange for stock.



Seesaws, Inc. has assets of $900 and liabilities of $400. Its stockholders' equity equals - correct answer
$500



The two sources of stockholders' equity are amounts ______. - correct answer -
earned and retained by the corporation

- paid in from shareholders



Which of the following are financial statements? (Check all that apply.) - correct answer
Statement of stockholders' equity

Income statement

Statement of cash flows

Balance sheet



Ace Electronics bought equipment for $4,000. Normally the equipment would have cost $4,500, but the
supplier gave Ace a special discount. Ace's balance sheet should report equipment of ______. - correct
answer $4,000

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