StieWikara WA worksheet 2023
Balance Sheet Worksheet
1. What is the primary purpose of a balance sheet?
a. To show revenue and expenses
b. To display assets and liabilities
c. To summarize cash flows
d. To calculate net income
2. Which of the following is considered a liability on the balance sheet?
a. Inventory
b. Accounts receivable
c. Accounts payable
d. Buildings
3. On a balance sheet, assets are typically listed in order of:
a. Liquidity
b. Size
c. Age
d. Alphabetical order
4. What is the formula for calculating equity on the balance sheet?
a. Assets - Liabilities
b. Liabilities - Assets
c. Assets + Liabilities
d. Liabilities + Assets
5. Which of the following is an example of a long-term liability?
a. Accounts payable
b. Short-term loan
c. Long-term loan
d. Salaries payable
StieWikara WA worksheet 2023
6. What does "working capital" represent on the balance sheet?
a. Total assets
b. Current assets - Current liabilities
c. Long-term liabilities
d. Equity
7. Where would you find the value of common stock on a balance sheet?
a. Assets section
b. Liabilities section
c. Equity section
d. Income statement
8. What is the purpose of the "retained earnings" section on the balance sheet?
a. To show the total revenue earned
b. To display the earnings retained for future investments
c. To list current liabilities
d. To summarize total assets
9. Which financial statement provides information about changes in equity over a specific period?
a. Income statement
b. Cash flow statement
c. Balance sheet
d. Statement of retained earnings
10. How are current assets different from non-current assets on the balance sheet?
a. Current assets are more valuable.
b. Current assets can be converted to cash more quickly.
c. Non-current assets are always intangible.
d. Non-current assets are not reported on the balance sheet.
StieWikara WA worksheet 2023
11. What is the purpose of the contra-asset account on the balance sheet?
a. To increase the value of assets
b. To offset the balance of a related asset account
c. To show total liabilities
d. To calculate net income
12. Where would you find the accumulated depreciation on the balance sheet?
a. Assets section
b. Liabilities section
c. Equity section
d. Income statement
13. What does the debt-to-equity ratio measure on the balance sheet?
a. The company's ability to generate revenue
b. The proportion of debt to equity in the capital structure
c. The liquidity of the company
d. The return on investment
14. Which of the following is an example of an intangible asset?
a. Buildings
b. Land
c. Patents
d. Inventory
15. What is the purpose of the "cash and cash equivalents" section on the balance sheet?
a. To show total cash inflows
b. To display the total cash available for operating activities
c. To list all sources of cash
d. To summarize total liabilities
StieWikara WA worksheet 2023
16. What is the primary function of the balance sheet in financial reporting?
a. To show revenue and expenses
b. To provide a snapshot of a company's financial position at a specific point in time
c. To calculate net income
d. To summarize cash flows
17. Which of the following is considered a current liability?
a. Long-term debt
b. Prepaid expenses
c. Accounts payable
d. Buildings
18. What is the formula for calculating the current ratio on the balance sheet?
a. Current assets / Current liabilities
b. Current liabilities / Current assets
c. Total assets / Total liabilities
d. Total liabilities / Total assets
19. Where would you find the net income on the balance sheet?
a. Assets section
b. Liabilities section
c. Equity section
d. Income statement
20. How does a balance sheet differ from an income statement?
a. A balance sheet reports revenues and expenses, while an income statement reports assets and
liabilities.
b. A balance sheet provides a snapshot of a company's financial position at a specific point in time,
while an income statement shows financial performance over a period.
c. A balance sheet is used for internal reporting, while an income statement is used for external
reporting.
d. A balance sheet includes only revenues, while an income statement includes only expenses.
