The Account Format Lists Assets on the Left Side and Liabilities

question 122

True/False

The account format lists assets on the left side and liabilities and stockholders' equity on the right side of the statement.

---

Definitions:

Interest Tax Shield

The saving in taxes due to deductible interest expenses, which reduces taxable income and ultimately decreases the tax liability.

Financial Risk

Financial Risk refers to the possibility of losing money on financial investments or transactions due to market fluctuations, credit issues, or other factors.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements.

Interest Tax Shield

A reduction in taxable income resulting from deductible interest expenses, typically from debts.