Which of the following associations is correct?
A)Balance sheet - cost of goods sold
B)Income statement - owner's equity
C)Current assets - inventory
D)Long-term liabilities - accounts payable

Question

Quizplus · Accepted Answer

Current assets typically include cash, accounts receivable, and inventory. Therefore, the association between current assets and inventory is correct. Balance sheet items such as liabilities and owner's equity do not appear on the income statement, and cost of goods sold is a line item on the income statement, not the balance sheet. Long-term liabilities and accounts payable are two different items; accounts payable are typically a current liability item, while long-term liabilities refer to debt obligations that are not due in the current accounting period.

Which of the Following Associations Is Correct