Reading 30: Financial Reporting Mechanics - LOS c ～ Q1-2

答案和详解如下：

1.What is the fundamental balance sheet equation?

A)   Assets = Liabilities + Stockholders' Equity (A = L + E).

B)   Liabilities = Assets + Stockholders' Equity (L = A + E).

C)   Stockholders' Equity = Assets + Liabilities ( E = A + L).

D)   Assets = Stockholders' Equity - Liabilities (A = E - L).

The correct answer was A)

The fundamental balance sheet equation is Assets = Liabilities + Stockholders’ Equity (A = L + E). This is the fundamental accounting relationship that sets the basis for recording all financial transactions.

2.The following amounts were drawn from the records of JME Company: total assets = $1,200; total liabilities = $750; contributed capital = $600. Based on this information alone, retained earnings must be equal to:

A)   –$150.

B)   $0.

C)   $150.

D)   $450.

The correct answer was A)

(1,200 – 750 – 600) = –150