1) Which of the following statements is true regarding the classified balance sh
ID: 2601645 • Letter: 1
Question
1) Which of the following statements is true regarding the classified balance sheet?
Choose one.
A) Current liabilities include accounts payable, salaries payable, and notes receivable.
B) Stockholders equity is subdivided into current and long term categories.
C) Plant, property, and equipment is one category of long term assets.
D) Current assets include cash, accounts receivable, and equipment.
2) True or False. The amounts in the Adjustments columns are always
added to the amounts in the Trial Balance columns to determine the
amounts in the Adjusted Trial Balance columns.
3)Net income for a period does not appear in which of the following.
Choose one.
A) Income statement debit column of the worksheet
B) Statement of retained earnings
C) Statement of retained earnings credit column of the worksheet.
D) Balance sheet
4) True or False. If a net loss occurs, it appears in the Income Statement
credit column and Statement of retained earnings debit column.
Explanation / Answer
1. Answer is C
A. Note receivable is not a current liability.
B. There is no division of Stockholders' equity as short and long term.
D.Equipment is a long term asset and not a current asset.
2. False.
The adjustment coulmn has two columns namley , debit and credit. Deprnding the nature of the accounts, the adjustments are either added or subtracted.
For asset accounts the amounts in the debit column are added and the amounts in the credit column are subtracted.
For liability accounts the amounts in the credit column are added and the amounts in the debit column are subtracted.
3. Answer is D.
4. True.
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