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1. Why would we use a balancing item in the Opening Balance Sheet to calculate Retained Profits?
Because we always use a balancing item to balance the Balance Sheet
Because this ensures that the Opening Balance Sheet will balance
Because we don’t trust the person who gives us the data to populate the Opening Balance Sheet
2. How do we calculate Net Assets?
Total Assets plus Total Liabilities
Total Assets minus Total Liabilities minus Total Equity
Total Assets minus Total Liabilities
3. Which of the following are reasons to use the Direct Cash Flow Statement?
None of the above
The Direct Cash Flow approach is based on your Income Statement
The Direct Cash Flow approach reconciles back to your bank account
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