Which of the Following Statement Is Incorrect Regarding How Balance

question 40

Multiple Choice

Which of the following statement is incorrect regarding how balance sheets are prepared?

• A) The left-hand side of a balance sheet shows a firm's assets.
• B) The assets on a balance sheet are shown in order of liquidity.
• C) Assets are recorded at fair market value rather than cost.
• D) The right-hand side of a balance sheet shows a firm's liabilities and its owners' equity.
• E) Intellectual property receives value in some cases and in some cases it does not.

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Definitions:

Ratio

A numerical ratio representing how often one number can be divided by another, showing either how many times one is included in the other or vice versa.

Partnership Interest

Ownership share or participation in a partnership that usually entitles the holder to a proportion of the partnership's profits and assets.

Capital Contributions

The funds or assets initially invested in a business or partnership by its owners or partners.

Ratio

A relationship in numbers expressing the frequency with which one value encompasses or is encompassed by another.