ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Such sales will not impact the company’s profit and loss statement
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Such sales will appear as liability in the company’s balance sheet
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Such sales will appear as asset in the company’s balance sheet
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Such sales will impact the cash flow statement
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Detailed explanation-1: -The items which are generally present in all the Balance sheet includes: Assets like cash, inventory, accounts receivable, investments, prepaid expenses, and fixed assets. Liabilities like long-term debt, short-term debt, Accounts payable, Allowance for the Doubtful Accounts, accrued and liabilities taxes payable.
Detailed explanation-2: -A balance sheet gives you a snapshot of your company’s financial position at a given point in time. Along with an income statement and a cash flow statement, a balance sheet can help business owners evaluate their company’s financial standing.
Detailed explanation-3: -Assets represent the company’s economic resources that are used in the business to generate revenue. Examples are prepaid expense, supplies, cash, accounts receivable, building, and equipment.
Detailed explanation-4: -Typically, a company’s income statement highlights the net sales figure. In some cases, companies will choose to report both gross and net sales, but they will always be displayed as separate line items. The deductions from gross sales show the quality of sales transactions.