Chapter Quiz
1. If you buy a car and pay 10 percent of the cost in cash, and take out a loan for the remaining 90 percent, which part of the accounting equation will contain the loan?
- equity (n this example, the equity would be the down payment on the car, not the loan)
- liabilities (The liabilities are the source of the financing to buy an asset.)
- cash
- assets
2. Which financial report consists of a list of assets and liabilities?
- profit and loss statement
- balance sheet (A balance sheet lists an organization's resources and obligations)
- statement of cash flows
- income statement