Lessons: Chapter 4 - Balance Sheet Basics

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Important Links

Breaking down the balance sheet: Balance Sheet: Balance Sheets

Video on the balance sheet: Balance Sheets

Video: How To Read a Balance Sheet

Video from MoneyWeek on balance sheets: MoneyWeek Video

Video on how to create a balance sheet: Balance Sheet Creation


Assignments

4.1: The money you invest in a business is called:

  1. Equity
  2. Liability
  3. Asset

4.2: What is the correct equation that shows the relationship between assets, liabilities, and equity:

  1. Liabilities + Assets = Equity
  2. Assets + Liabilities = Equity
  3. Liabilities = Assets - Equity

4.3: If a company's asset balance is $100,000 and its liability balance is $80,000, what is its equity?

4.4: If a company has equity of $50,000, and liabilities of $150,000, what is the balance of its assets?

4.5: If an asset has a life of 5 years, what is the depreciated value at the end of the 3rd year?

4.6: What one of these calculations most accurately reflects how to calculate current assets of a hypothetical company?

  1. Current Asset = Cash + Marketable Securities + Equipment
  2. Current Asset = Cash + Marketable Securities + Accounts Payable
  3. Current Asset = Cash + Marketable Securities + Long-Term Debt
  4. Current Asset = Cash + Marketable Securities + Inventory

4.7: What one of these calculations most accurately reflects how to calculate current liabilities of a hypothetical company?

  1. Current Liabilities = Accounts Payable + Cash + Equipment
  2. Current Liabilities = Accounts Payable + Inventory + Long-Term Debt
  3. Current Liabilities = Accounts Payable + Marketable Securities + Long-Term Debt
  4. Current Liabilities = Accounts Payable + Notes Payable + Accrued Expenses

 

> Answers to Chapter 4 Assignments