Which of the Following Would Be Reported as an Asset

question 15

Multiple Choice

Which of the following would be reported as an Asset with Restrictions on Use?

• A) A cash contribution for a program activity, such as diabetes research.
• B) A cash contribution for a new building.
• C) Cash restricted by debt covenants with lenders.
• D) Cash restricted by the board for purchase of new computer equipment.

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Definitions:

Net Income

The net income a company earns following the subtraction of all taxes and expenses from its revenues.

Revenues

The entire sum of earnings resulting from the sales of products or services central to a business's primary functions.

Office Supplies

Tangible items used in an office environment for daily operations, such as pens, paper, and staplers.

Stockholders' Equity

The portion of the balance sheet that represents the capital received from investors in exchange for stock, plus retained earnings and minus the company's treasury stock.