Q6Managerial Economics & Financial Accounting
Question
Give brief answer of following Questions on Balance Sheet: (1\times4=4) a) On balance sheet, accruals, notes payable, and account payable are listed under which category? b) Inventories, cash and equivalents, and accounts receivables are listed as? c) A firm buys products but does not pay to suppliers instantly. This is recorded as? d) In a balance sheet, the total of common stock and retained earnings are denoted as?
Answer
Balance sheet categorization: current liabilities, current assets, accounts payable, and shareholders' equity.
a) Accruals, notes payable, and accounts payable are listed under Current Liabilities. b) Inventories, cash, and accounts receivables are listed as Current Assets. c) Buying products without paying instantly is recorded as Accounts Payable (Creditors). d) Total of common stock and retained earnings is denoted as Shareholders' Equity (or Net Worth).