Question

Question 1 Which of the following is NOT true about the Balance Sheet? The balance sheet shows Assets O The balance sheet shows retained earnings The balance sheet shows that total assets equals to liabilities plus equity Deferred revenue is NOT an item on the balance sheet.

Answer 1

1) Balance sheet shows Assets, Liabilities, Stockholder's equity and stockholder's Equity includes Retained earnings as well. Where as Deferred revenue is a Liability and it is shown in the Liabilities side of the Balance sheet. Deferred is an item on the balance sheet.

So, The statement Deferred revenue is an item on the balance sheet is correct phrase .

Option '4' is correct answer

2) Property, Plant and Equipment is a Fixed Asset which appears on the balance sheet. It is a long term asset so it is not treated as a current asset. where as Accounts payable is a current liability.

Option '3' is correct answer

3) Accounts receivable is a current Assets appears on the asset side of the balance sheet, Retained Earnings is a item of Stockholder's equity, where as in classified balance sheet, Assets are classified as Current Assets, Long term investments, Plant property and equipment, Intangible assets and other assets, where as liabilities are classified as current liabilities and Long term liabilities.

Dividend is an Equity account, Stockholder's equity will be reduced by the amount of dividends paid.

Option '3' is correct answer

Dividend is an Equity account is True.