Which statement about the balance sheet is true?

Question

Quizplus · Accepted Answer

The balance sheet lists the assets in order of liquidity, which means the assets that will be converted to cash first are listed first, and the longest-lived assets are listed last. Option A is incorrect because the income statement shows what happened to the firm during that year, not the balance sheet. Option B is incorrect because the income statement shows how much money the company earned during that year, not the balance sheet. Option C is incorrect because the market value of the stock may be different from the book value, depending on various factors such as market conditions, earnings history, and future growth prospects.

Which Statement About the Balance Sheet Is True