Financial statements - Balance sheet

Question 1

Accounting equation

Answer 1

Assets = liabilities + owner’s equity (OE)

Question 2

A listing of assets and claims against assets

Answer 2

Balance sheet
(same as A listing of assets and sources of assets)

Question 3

Look at right hand side of balance sheet as _______

Answer 3

sources of assets

Question 4

owner’s stake in the business

Answer 4

owners equity

Question 5

Listing of assets represents the ____ between __________ OR __________

Answer 5

Listing of assets represents the BALANCE between CLAIMS AND ASSETS OR ASSETS AND SOURCES OF ASSETS

Question 6

A listing of assets and sources of assets

Answer 6

Balance sheet
(same as A listing of assets and claims against assets)

Question 7

T/F: Equity is what you have left to spend

Answer 7

True - it is your STAKE; what you have left after what you subtract from creditors

Question 8

amounts owed to others; an “existing” obligation to pay or perform some duty

Answer 8

liabilities

Question 9

Explain the difference between assets and net worth

Answer 9

assets = liabilities + owners equity
net worth = owners equity

Question 10

economic resources of the entity

Answer 10

asset

Question 11

assets include ?

Answer 11

cash, accounts receivable (Amounts owed to firm by its customers), inventories, land, buildings, equipment, even intangible assets like patents and other legal rights

Question 12

liabilities include?

Answer 12

loans, extensions of credit, other obligations arising in the course of business

Question 13

distributions to shareholders as a return on their investment

Answer 13

dividends

Question 14

income of the business that has NOT been distrubuted to the owners of the business

Answer 14

retained earnings