Balance Sheet Quiz
9 multiple-choice questions with answers and explanations · 2 easy, 6 medium, 1 hard
The statement of financial position: current versus non-current classification, the operating cycle, and working capital.
- 1Current vs Non-Current ClassificationA loan is due to be repaid in 18 months from the reporting date. On a classified statement of financial position, this loan is presented as:easy
- 2US GAAP: Balance Sheet OrderingOn a classified balance sheet prepared under US GAAP, the conventional presentation is:easy
- 3IAS 1 — Components of Financial StatementsAccording to IAS 1, which of the following is NOT a required component of a complete set of financial statements?medium
- 4Going ConcernThe going concern assumption means that:medium
- 5Computing Working CapitalA company has current assets of $150,000 and current liabilities of $90,000. Its working capital is:medium
- 6The Operating CycleA company's normal operating cycle is 14 months (longer than a year) because inventory is manufactured and sold slowly. Its trade payables to raw-material suppliers are due for settlement in 13 months, within that cycle. Under IAS 1 these trade payables are classified as:medium
- 7Order of Liquidity PresentationIAS 1 permits an entity to present assets and liabilities either classified as current/non-current or in order of liquidity. Presenting in order of liquidity is generally more appropriate for:medium
- 8Splitting the Current Portion of a Long-Term LoanA company has a $100,000 long-term loan, of which $20,000 is due for repayment within the next 12 months. On a classified statement of financial position, this loan is reported as:medium
- 9Refinancing a Current Liability (IAS 1)A company has a loan of $500,000 due within 12 months of the reporting date. Before the financial statements are authorized for issue, it refinances the loan on a long-term basis. Under IAS 1, the loan is classified as:hard