Which of the Following Statements Is True

question 123

Multiple Choice

Which of the following statements is true?

• A) Property, plant, and equipment are classified as intangible assets on the statement of financial position.
• B) Current liabilities are debts expected to be paid out of current assets within the next year.
• C) Current assets are resources of a company which might include cash and copyrights.
• D) Accumulated depreciation is the amount of depreciation on the income statement for the current year.

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Definitions:

Debt to Stockholders' Equity

A financial ratio that measures the company's financial leverage by comparing its total liabilities to stockholders' equity.

Capital Lease

A lease treated like a purchase by the lessee in accounting, meaning the leased asset is included on the balance sheet, and the corresponding lease obligation is treated as a liability.

Operating Lease

A lease agreement that allows for the use of an asset but does not convey rights of ownership to the lessee.

GAAP

GAAP (Generally Accepted Accounting Principles) is a collection of commonly-followed accounting rules and standards for financial reporting.