Lessons: Chapter 4 - Balance Sheet Basics

## Important Links

Breaking down the balance sheet: Balance Sheet: Balance Sheets

Video on the balance sheet: Balance Sheets

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