Practice question · Select all that apply
Which items belong in the equity section of the balance sheet?
Hints
- Equity covers what owners contributed and what was kept inside.
- An obligation to a supplier is not an owner's claim.
Show the answer
- A. Share capital
- C. Retained earnings
- D. Revaluation reserves
Why
Share capital (what owners put in), retained earnings (profits left inside), and reserves (revaluations, other comprehensive income). Accounts payable is a liability, a creditor claim, not an owner claim.
Practise The Balance Sheet
The app has 6 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on The Balance Sheet
- A firm with negative net working capital is always insolvent.
- Current or non-current? Classify each item.
- Match each balance-sheet ratio to what it measures.
- A supermarket chain runs with negative working capital year after year and is perfectly healthy. How?
- A company has current assets 80 and current liabilities 110. What does this tell us?
- Order balance-sheet items from most liquid to least liquid.