Asked by Audriana Bridley on May 10, 2024
Verified
Which of the following statements describes the balance sheet?
A) It reports a company's revenues and expenses.
B) Assets are generally reported on the balance sheet at the cost incurred to acquire them.
C) Stockholders' equity includes only retained earnings.
D) It reports a company's cash flow from operations.
Retained Earnings
The portion of a company's profits not distributed as dividends to shareholders, but instead reinvested in the business or held as reserves.
Assets
Assets are resources owned by a business or individual, which provide economic value or are expected to generate future benefit.
Revenues
The income generated from normal business operations and includes discounts and deductions for returned merchandise.
- Understand the structure and purpose of the balance sheet and its major components.
Verified Answer
Learning Objectives
- Understand the structure and purpose of the balance sheet and its major components.
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