Balance Sheet Basics

Which financial statement provides a snapshot of a company's assets, liabilities, and equity at a specific point in time?

The fundamental accounting equation is Liabilities = Assets + Equity.

In a detailed balance sheet, assets are classified into current and _______ categories.

Which of the following is an example of a current asset?

What is the starting point for creating a balance sheet?

Revenue and expense accounts are not necessary to calculate retained earnings on the Balance sheet.

Match each term with its description:

Which of the following is an example of a non-current liability?

_________ represents capital contributions from owners in the equity section of a detailed balance sheet.

What is the ultimate check to ensure you that the balance sheet is correct?

What is the term for accumulated profits kept for future use in a company?

Adjusting entries do not need to be posted to the trial balance before creating a balance sheet.

What is the primary difference between a basic and a detailed balance sheet?

Retained earnings are calculated from opening retained earnings, adding net profit for the year, and deducting ________.

Failing to account for revenue and expense accounts when creating a balances sheet, will result in what?

What are adjusting entries, in the context of creating a balance sheet?

In the trial balance, accounts are typically arranged with liabilities at the top, followed by assets, equity, revenue, and expenses.

A company incorrectly classifies a long-term loan as a current liability. What is the impact on the balance sheet?

If a company reports opening retained earnings of $100,000, net profit of $50,000, and pays dividends of $20,000, the ending retained earnings balance would be $________.

Explain the impact of an incorrect revenue recognition on both the income statement and the balance sheet.