The Balance Sheet and the Statement of Changes in Stockholders’ EquityChapter4

hapter 4–The Balance Sheet and the Statement of Changes in Stockholders’ EquityChapter4–The Balance Sheet and the Statement of Changes inStockholders’ EquityStudent: ___________________________________________________________________________1.If the owners’ equity at the end of the accounting period is greater than the owners’ equity at the beginning ofthe accounting period, the firm’sA.capital has increasedB.working capital has increasedC.cash has increasedD.capital has been maintained2.All of the following items would appear on the balance sheet exceptA.an investment in another company’s bondsB.an investment in marketable securitiesC.a realized gain on the sale of a patentD.the premium related to a bond liability that is still two years from maturity3.The ease with which an asset can be converted into cash is termedA.financial flexibilityB.liquidityC.operating capabilityD.capital maintenance4.The quantity of goods or services produced in a given period or the physical capacity of the operating assetsused to produce goods or services are measures ofA.financial flexibilityB.liquidityC.operating capabilityD.capital maintenance