Question

1. Which of the following financial statements groups together accounts of similar nature and reports them in a few major classifications?

1. Classified-balance sheet
2. Multi-step income statement
3. Statement of stockholders equity
4. Statement of cash flows

SelectabcdItem 1

2. What is unique about reporting current assets?

1. Current assets are reported after they are converted into cash
2. Current assets are reported in the order of their liquidity
3. Current assets are reported net of depreciation
4. Current assets are reported from highest to lowest

SelectabcdItem 2

3. Identify current liabilities from the following:

[Accounts payable, Bonds payable, Accrued expenses, Notes payable, Merchandise credit]

1. Accounts payable, Accrued expenses, Notes payable
2. Accounts payable, Bonds payable, Merchandise credit
3. Accrued expenses, Notes payable, Merchandise credit
4. Accounts payable, Accrued expenses, Merchandise credit

SelectabcdItem 3

4. The main sources of generating equity are:

1. Retained earnings and Cash flows
2. Retained earnings and Contributed capital
3. Cash flows and Contributed capital
4. Cash flows and Income statement

Selectabcd

Answer 1

Q1.
Answer is a. Classified Balance Sheet.
explanation:
In balance Sheet, the assets are grouped under different heads. The liabilities are also grouped under current liabilities and long term liabilities.
Q2.
Answer: b. Current Assets are reported in the order of liquidity.
Explanation:
Firstly reported is cash, then Accounts receivable, inventory, etc
Q3.
Answer is d. Accounts payable, Accrued expenses, Merchandise credit
Explanation:
The current liabilities is payable in 12 months.
Q4.
Answer is b. Retained earnings and Contributed Capital