8th Edition

ISBN: 9780078025556

Author: Robert Libby, Patricia Libby, Daniel Short

Publisher: McGraw-Hill Education

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Textbook Question

Chapter 5, Problem 2P

Matching Definitions with Balance Sheet-Related Terms

Following are terms related to the balance sheet that were discussed in Chapters 2 through 5. Match each definition with its related term by entering the appropriate letter in the space provided.

Terms

Definitions

_ (1) Capital in excess of par

_ (2) Assets

_ (3) Retained earnings

_ (4) Book value

- (5) Other assets

_ (6) Shares outstanding

_ (7) Shareholders' equity

_ (8) Liquidity

_ (9) Normal operating cycle

_(10) Current assets

_ (11) Current liabilities

_ (12) Long-term liabilities

_ (13) Fixed assets

_ (14) Liabilities

_ (15) Contra-asset account

_ (16) Accumulated depreciation

_ (17) intangible assets

A. Nearness of assets to cash (in time).
B. Liabilities expected to be paid out of current assets normally within the next year.
C. All liabilities not classified as current liabilities.
D. Total assets minus total liabilities.
E. Probable future economic benefits owned by the entity from past transactions.
F. Debts or obligations from past transactions to be paid with assets or services.
G. Assets expected to be collected in cash within one year or the operating cycle, if longer.
H. Assets that do not have physical substance.
I. Balance of the Common Stock account divided by the par value per share.
J. A miscellaneous category of assets.
K. Sum of the annual depreciation expense on an asset from its acquisition to the current date.
L. Asset offset account (subtracted from asset).
M. Accumulated comings minus accumulated dividends.
N. Property, plant, and equipment.
O. Same as carrying value; cost less accumulated depreciation to date.
P. Amount of contributed capital less the par value of the stock.
Q. The average cash-to-cash time involved in the operations of the business.
R. None of the above.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 5, Problem 1P

Chapter 5, Problem 3P

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Chapter 5 Solutions

Financial Accounting, 8th Edition

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Solution Summary: The author explains the definition of capital, liabilities, and stockholders' equity in the balance sheet.

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