BrainMass Quizzes Balance Sheet The Fundamental Classified Balance Sheet. What to know to make it easy. 1 The Balance sheet is balanced because Assets = Liabilities True False 2 Which item is not an Asset? Building Desks Company Car Employee coffee machine Sales 3 What item is a Liability? Poor employees Worn out machines Bad Supervisors Sales returns Unpaid Taxes 4 Liabilities + Equity = Assets True False 5 Cash = 50, Other Assets = 50, Liability = 90. What is the Equity? 190 10 200 140 50 6 When an owner takes money out of the company, what happens? He must pay it back. He owns it so the accounts are not adjusted. The cash account is reduced and equity increases. He doesn't have to pay it back. His Assets are increased. 7 Insurance is an asset when - You collect on it. You cancel it. You don't make your insurance payment. You over pay. You collect more than you paid. 8 You owe $50 and you have $50 coming next month. What is the Current Asset? They are both Current Assets. The $50 received in the next month. There is no Current Asset. The dinner you bought on your credit card for $50 The $50 that you owe. 9 Sales are good. What would be the affect on the Balance Sheet? Equity would increase. Cash would increase. The Assets are not affected. Your employees get a bonus. Your business is profitable. 10 Assets = Liabilities + Equity. Therefore what would be correct is Equity was $100? Assets = Liabilities Assets + Liabilites = 100 Assets - 100 = Liabilities 100 = Liabilities - Assets Assets + Liabilities = 100 Submit Quiz