Use the Table for the Question(s)below

question 48

Multiple Choice

Use the table for the question(s) below.
-If the above balance sheet is for a retail company, what indications about this company would best be drawn from the changes in the balance sheet between 2017 and 2018?

• A)The company has reduced its debt.
• B)The company has added a major new asset in terms of plant and equipment.
• C)The company is having difficulties selling its product.
• D)The company has experienced a significant rise in its market value.

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Definitions:

Goodwill Method

An accounting method used to determine the value of a non-tangible asset acquired when one company buys another.

Profits and Losses

Financial terms representing the positive or negative financial outcomes resulting from a company's operations and activities.

LLP

Limited Liability Partnership, a partnership where some or all partners have limited liabilities, protecting individual partners from the debts of the partnership.

Net Income

The amount of profit that remains after subtracting all the costs, taxes, and expenses from total revenue.