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: 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