Balance Sheet Basics Quiz

Which of the following is an example of an asset?

• Accounts payable

• Short-term loan

• Cash

• Owner's draw

What is the main difference between current liabilities and long-term liabilities?

• Current liabilities are due within one year, while long-term liabilities are due after one year.

• Long-term liabilities are owed to the business owner, while current liabilities are owed to external creditors.

• Current liabilities refer to the company’s assets, while long-term liabilities refer to expenses.

• Long-term liabilities are paid off immediately, while current liabilities are spread over the year.

Which of the following is considered a non-current asset?

• Cash

• Inventories

• Fixed asset

• Accounts receivable

Which of the following would be classified as an intangible asset?

• Machinery

• Building

• Goodwill

• Accounts payable

What is meant by “accounts payable”?

• The amount of money the business owes to others.

• The amount of money customers owe the business.

• The company’s assets that are available for sale.

• Money that the business owner invests in the company.

Which of the following is considered a current liability?

• Short-term loans

• Fixed asset

• Intangible asset

• Retained earnings

What are "retained earnings"?

• The total amount of money the business owner has invested in the business.

• The net income of the business that has been kept (not distributed to owners).

• The total debt the company owes to creditors.

• The amount of money the business owes to its customers.

Which of the following describes "net income"?

• The total revenue of a business.

• The total debt the business owes.

• The profit made after subtracting expenses from revenue.

• The amount of money the business owner withdraws from the business.

What is the difference between current and non-current assets?

• Current assets are expected to be used or sold within one year, while non-current assets are held for longer periods.

• Non-current assets are less valuable than current assets.

• Current assets are owned by the business, while non-current assets are owed to others.

• Non-current assets include only cash, while current assets include inventories.

If a company takes out a short-term loan, how should this be classified?

• Asset

• Equity

• Liability

• Revenue