40 financial statements fall into three broad

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40. Financial statements fall into three broad categories, which are debits, credits, and loans. income statements, balance sheets, and statements of cash flows. assets, liabilities, and owners' equity. cash, marketable securities, and goodwill. budgets, income statements, and profit-and-loss statements. Difficulty: 2 QuestionID: 11-1-40 Page-Reference: 252 Skill: Knowledge Objective: 11.3 Answer: income statements, balance sheets, and statements of cash flows. 41. Which of the following ensures that the accounting equation is always kept in balance? Credits Debits Double-entry accounting Balance sheet T-accounts
Difficulty: 1 QuestionID: 11-1-41 Page-Reference: 252 Skill: Knowledge Objective: 11.3 Answer: Double-entry accounting 42. Peter, an accountant, enters every transaction in the journal to reflect its impact on assets and its impact on liabilities and owners' equity. He is using
Difficulty: 2 QuestionID: 11-1-42 Page-Reference: 252 Skill: Comprehension Objective: 11.3 Answer: a double entry accounting system.
43.
Difficulty: 1 QuestionID: 11-1-43 Page-Reference: 252 Skill: Knowledge Objective: 11.3 Answer: balance sheet. 44. What are the three types of assets that will typically be found on a balance sheet?
Difficulty: 2 QuestionID: 11-1-44 Page-Reference: 252-253 Skill: Knowledge Objective: 11.3 Answer: Current, fixed, and intangible 45. A balance sheet would not be able to help a manager answer which question? Is it a good time to try to grow the business? Can the company survive if a period of low revenues happens? Does the company have an excessive number of employees? Is the company able to take on more debt? What is the total value of all of the company's assets?
Difficulty: 1 QuestionID: 11-1-45 Page-Reference: 252 Skill: Comprehension Objective: 11.3 Answer: Does the company have an excessive number of employees?
46. If the following facts were known, which one would strengthen the argument that a company would be able to meet its current financial obligations?
Difficulty: 3 QuestionID: 11-1-46 Page-Reference: 252 Skill: Analysis Objective: 11.3 Answer: Assets exceed liabilities. 47. A current asset is an expense, such as rent, that is paid before the upcoming period in which it is due.

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