Which one of these accounts appears on the right-hand side of a balance sheet?
a. Property, plant, and equipment
b. Accumulated retained earnings
c. Accumulated depreciation
d. Cash and equivalents
e. Intangible assets
b. Accumulated retained earnings
The entire book value of the residual ownership of a corporation is known as the
a. Total equity
b. Intangible assets
c. Retained earnings
d. Capital surplus
e. Total assets
a. Total equity
Which account represents the book value of all of a corporation’s net profits less its dividend payments?
a. Capital surplus
b. Accumulated retained earnings
c. Treasury stock
d. Common stock
e. Preferred stock
b. Accumulated retained earnings
Which one of the following is a current liability?
a. Amount due to a supplier in 18 months
b. Note payable in 9 months
c. Estimated taxes just paid
d. Loan payment due in 13 months
e. Amount due from a customer in 30 days
b. Note payable in 9 months
An increase in total assets
a. Means that net working capital is also increasing
b. Requires an investment in fixed assets
c. Means that stockholders’ equity must also increase
d. Must be offset by an equal increase in liabilities and stockholders’ equity
e. Can only occur when a firm has positive net income
d. Must be offset by an equal increase in liabilities and stockholders’ equity
Which onoe of the following statements concerning liquidity is correct?
a. Liquid assets generally earn higher rates of return than fixed assets
b. If you can sell an asset next year at a price equal to its actual value, the asset is highly liquid
c. Liquid assets are defined as those assets obtained within the past year
d. The less liquidity a firm has, the lower the probability the firm will encounter financial difficulties
e. Balance sheets accounts are listed in order of decreasing liquidity
e. Balance sheets accounts are listed in order of decreasing liquidity
