According to FASB Concept Statement No

question 67

Multiple Choice

According to FASB Concept Statement No.6,Elements of Financial Statements,companies routinely incur liabilities to acquire funds,goods,and services they need to operate or expand their business.Which of the following is an example of this?

• A)borrowing money obligates the company to repay the loan
• B)buying assets on credit obligates the company to pay for them
• C)planning the knowledge,time,and skill of employees obligates the company to pay for their use
• D)using company owned assets obligates the company to pay for their use
• E)acquiring assets with a trade-in with cash obligates the company to pay for them
• F)both A and B
• G)both C and E
• H)both D and E

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Definitions:

Statement Of Owner's Equity

A financial document detailing changes in the equity of a company due to earnings, withdrawals, and other factors over a period.

Balance Sheet

A report detailing a corporation's assets, liabilities, and equity of shareholders at a certain moment.

Statement Of Owner's Equity

A financial statement that shows the changes in the equity of a company over a specific period, including contributions, withdrawals, and the company’s net income or loss.

Net Income

The amount of profit left after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total revenues.