Reference no: EM132999036

Problem 1: Liabilities are reported on the

Select one:

a. income statement

b. balance sheet

c. statement of cash flows

d. statement of owner's equity

Problem 2: A corporation is a business that is legally separate and distinct from its owners.

Select one:

True

False

Problem 3: All of the following statements regarding the ratio of liabilities to owner's equity are true except

Select one:

a. corporations can use this ratio but substitute total stockholders' equity for total owner's equity

b. the higher this ratio, the better able a business is to withstand poor business conditions and pay creditors

c. a ratio of 1 indicates that liabilities equal owner's equity

d. the lower this ratio, the better able a business is to withstand poor business conditions and pay creditors

Problem 4: If an owner wanted to know how money flowed into and out of the company, which financial statement would the owner use?

Select one:

a. balance sheet

b. income statement

c. statement of cash flows

d. statement of retained earnings