The Following Items Are Components of a Firm's Balance Sheet

question 86

Multiple Choice

The following items are components of a firm's balance sheet. How much is the firm's working capital (net working capital) ?

• A)$14,500
• B)$ 2,500
• C)$18,500
• D)$12,500

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Definitions:

Equipment Account

An account on the balance sheet that represents the total cost of machinery and equipment owned by a company, less accumulated depreciation.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, representing the reduction in value of the asset over time.

Book Value

The net value of an asset or liability recorded on the balance sheet, often different than its fair market value.

Building Account

An account used to track the costs associated with the construction or improvement of a building until the project is completed and the asset is ready for use.