Deck 5: The Balance Sheet Statement of Financial Position

Question 1

A Balance Sheet shows that a business is funded by:
A Capital introduced by the owner
B Money borrowed from outsiders
C Retained profits from the current and prior years
D All of the above

Answer 1

D

Question 2

What is a firm's balance date?
A The date the business was formed
B Any day when all the firm's accounts are in balance
C The first day of the business's financial year
D The last day of the business's financial year
E The day the business is wound up

Answer 2

D

Question 3

What names are acceptable for the statement describing financial position?
A Statement of Assets,Liabilities and Equity
B Balance Sheet
C Financial Position Statement
D NZ IAS 1 recommends Statement of Financial Position but allows for alternative names to be used

Answer 3

D

Question 4

A patent would most accurately be classified on the Balance Sheet under:
A Current assets
B Financial assets (investments)
C Intangible assets
D Non-current assets

Question 5

From the following partial trial balance,produce a Balance Sheet:

Question 6

Assets on the Balance Sheet may be valued at:
A Historical cost
B Current cost
C Net realisable value
D Any of the above

Question 7

Explain the difference between current and non-current assets.

Question 8

A 'T' format for the Balance Sheet shows:
A The assets section alongside liabilities and owner's equity
B The assets section above liabilities and owner's equity
C The liabilities section above assets and owner's equity
D The owner's equity section above liabilities and assets

Question 9

The Owner's equity section of a sole trader's Balance Sheet (assuming that a Statement of Changes in Equity is not used)would consist of:
A Share capital,asset revaluation reserves and retained earnings
B Capital invested,plus net profits,less drawings
C A combination of A and B
D None of the above

Question 10

The accounting equation can be expressed on the Balance Sheet as
A Assets = Liabilities x Owner's equity
B Assets = Liabilities - Owner's equity
C Assets = Liabilities + Owner's equity
D Assets = Liabilities ÷ Owner's equity

Question 11

The Balance Sheet can be used as:
A A statement to determine the business's solvency
B A statement to determine the business's economic potential
C A statement of accountability
D All of the above

Question 12

From the following partial trial balance,produce a Balance Sheet:

Question 13

Shares in Telecom would most accurately be classified on the Balance Sheet under:
A Current assets
B Financial assets (investments)
C Intangible assets
D Non-current assets

Question 14

From the following partial trial balance,prepare a Balance Sheet (Statement of Financial Position):