Q1. Consider the following:

Statement #1 – The presentation formats of balance sheets vary from company to company.
Statement #2 – A classified balance sheet cannot follow an account format.

With respect to these statements:

A)   only one is correct.

B)   both are correct.

C)   both are incorrect.

Q2. Which of the following statements about a classified balance sheet is least likely accurate? A classified balance sheet:

A)   groups accounts by subcategories.

B)   distinguishes between current and noncurrent assets.

C)   presents the net equity of each asset by subtracting its related liability.

Q3. Is the following statement an accurate description of the account format and report format of presenting a balance sheet?

“The account format presents the asset, liability, and equity accounts in a single column while a report format presents the assets, liabilities, and equity in multiple columns.”

          Account format               Report format

A) Yes                                             Yes

B) No                                              No

C) No                                              Yes

答案和详解如下：

Q1. Consider the following:

Statement #1 – The presentation formats of balance sheets vary from company to company.
Statement #2 – A classified balance sheet cannot follow an account format.

With respect to these statements:

A)   only one is correct.

B)   both are correct.

C)   both are incorrect.

Correct answer is A)

The presentation formats of balance sheets vary by company. A classified balance sheet can be presented in a report format or an account format.

Q2. Which of the following statements about a classified balance sheet is least likely accurate? A classified balance sheet:

A)   groups accounts by subcategories.

B)   distinguishes between current and noncurrent assets.

C)   presents the net equity of each asset by subtracting its related liability.

Correct answer is C)

A classified balance sheet groups assets and liabilities by subcategories. It distinguishes between current and noncurrent assets and current and noncurrent liabilities. The assets and related liabilities are reported separately, they are not netted.

Q3. Is the following statement an accurate description of the account format and report format of presenting a balance sheet?

“The account format presents the asset, liability, and equity accounts in a single column while a report format presents the assets, liabilities, and equity in multiple columns.”

          Account format               Report format

A) Yes                                             Yes

B) No                                              No

C) No                                              Yes

Correct answer is B)

The account format follows the traditional ledger account, assets on the left hand side and liabilities and equity on the right hand side. With a report format, the assets, liabilities, and equity are presented in a single column.

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