Reading 33: Understanding the Balance Sheet - LOS b ～ Q1-3 following, white, style, black, class

mayanfang1

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

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