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Questions and Answers
What is the main difference between Current Assets and Intangible Assets?
What is the main difference between Current Assets and Intangible Assets?
- Current assets are due within 1 year, while intangible assets are not time-bound.
- Current assets are owned outright by the company, while intangible assets are always associated with debt.
- Current assets can be converted into cash in 1 year, while intangible assets cannot be resold. (correct)
- Current assets include property, plant, and equipment, while intangible assets include patents and copyrights.
How do Accrual Accounting and Cash-basis Accounting differ?
How do Accrual Accounting and Cash-basis Accounting differ?
- Accrual Accounting is used for liabilities, while Cash-basis Accounting is used for assets.
- Cash-basis Accounting is more accurate than Accrual Accounting in recognizing revenue.
- Accrual Accounting is simpler than Cash-basis Accounting in practice.
- Accrual Accounting records revenue when it is earned, while Cash-basis Accounting records revenue only when cash is received. (correct)
Which of the following statements best describes Stockholders Equity?
Which of the following statements best describes Stockholders Equity?
- Stockholders Equity represents the company's debts.
- Stockholders Equity includes patents and copyrights.
- Stockholders Equity is the same as Current Liabilities.
- Stockholders Equity consists of common stock and retained earnings. (correct)
What happens to the numbers on the Income Statement at the end of a period?
What happens to the numbers on the Income Statement at the end of a period?
When do expenses appear on the Income Statement?
When do expenses appear on the Income Statement?
Which financial statement shows the Net Income or Net Loss of a company?
Which financial statement shows the Net Income or Net Loss of a company?
What is the formula for calculating Net Income on an Income Statement?
What is the formula for calculating Net Income on an Income Statement?
Which of the following is considered a Current Liability?
Which of the following is considered a Current Liability?
On a Balance Sheet, what does Equity represent?
On a Balance Sheet, what does Equity represent?
Which of the following is an example of an Intangible Asset?
Which of the following is an example of an Intangible Asset?
What does the formula Balance Sheet Assets = Liabilities + Equity represent?
What does the formula Balance Sheet Assets = Liabilities + Equity represent?
When calculating Retained Earnings, which of the following is subtracted from Net Income?
When calculating Retained Earnings, which of the following is subtracted from Net Income?
What is the purpose of the Statement of Retained Earnings?
What is the purpose of the Statement of Retained Earnings?
'Outstanding stock' refers to shares that are:
'Outstanding stock' refers to shares that are:
What happens to the numbers on the Income Statement at the end of a period?
What happens to the numbers on the Income Statement at the end of a period?
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