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Chapter 7
Chapter 7
Review Questions:
| 1. | False. Narrative explanations of numbers contained in financial statements, called “notes to financial statements,” often are desirable and necessary in addition to financial statements. |
| 2. | Trick qaestion; it’s both True and False. Business assets do include cash, but also include accounts receivable, inventory, prepaid expenses, property and eqaipment, intangible assets, and others. |
| 3. | False. Some assets, known as intangible assets, are not easily assessed, although they clearly are assets. One such asset is goodwill, which arises when a business is sold or reorganized. |
| 4. | True. |
| 5. | False. Deferred income is considered to be a liability. |
| 6. | True. |
| 7. | c. |
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