Accounting - Study Mode
[#1941] Assets minus liabilities equal to
Correct Answer
(D) Capital
Explanation
Solution: Assets minus liabilities equal to Capital, it shows that a company's total amount of assets equals the total amount of liabilities plus owner's (or stockholders') equity.
[#1942] Which of the following financial statements shows the movement of cash and cash equivalents during an accounting period?
Correct Answer
(C) Cash flow statement
Explanation
Solution: Cash flow statement shows the movement of cash and cash equivalents during an accounting period. A cash flow statement, also known as statement of cash flows or funds flow statement, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities.
[#1943] Goodwill is classified as which one of the following assets?
Correct Answer
(D) Intangible
Explanation
Solution: Goodwill is classified as Intangible assets. The goodwill amounts to the excess of the "purchase consideration" (the money paid to purchase the asset or business) over the total value of the assets and liabilities. It is classified as an intangible asset on the balance sheet, since it can neither be seen nor touched.
[#1944] Which of the following does not appear in Balance sheet?
Correct Answer
(D) Rent expenses
Explanation
Solution: Rent expenses does not appear in Balance sheet.
[#1945] Current assets are also known as
Correct Answer
(A) Gross working capital
Explanation
Solution: Current assets are also known as Gross working capital. Gross working capital is the sum of all of a company's current assets (assets that are convertible to cash within a year or less).