The Most Important Item on the Balance Sheet Is

question 95

Multiple Choice

The most important item on the balance sheet is:

• A)cash.
• B)disbursements.
• C)expenses.
• D)receivables.

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Definitions:

Net Proceeds

The amount of money received from a transaction after deducting all associated costs and expenses.

Cost Method

An accounting approach used for investments, where the investment is recorded at cost and adjustments are made for dividends received or permanent declines in value.

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks, that provide the holder with claims on the firm's profits.

Fair Value

The estimated price at which an asset would exchange hands between a willing buyer and seller, neither being under any pressure to act.