Question

Anna is creating a personal balance sheet. She plans to list these items.


Bank Account
Jewelry

Health Insurance

Rent


Which statements about the balance sheet are correct? Select three choices.
Health insurance, and rent will be listed in the liabilities column.
Anna will need to find the total value of her jewelry and bank account.
The period of the balance sheet will be one year.
Anna will add the value of the assets and subtract the value of the liabilities.
The items in the table will be listed in four columns.

Answer 1

Correct answers:
- Anna will need to find the total value of her jewelry and bank account.
- Anna will add the value of the assets and subtract the value of the liabilities.
- The items in the table will be listed in four columns.

Why:
- Bank account and jewelry are assets, so she must total their values. Net worth on a balance sheet is assets minus liabilities.
- A common balance-sheet layout shows two sections (assets and liabilities) with two columns each (description and amount), so four columns in the table.
- Health insurance and rent are normally expenses or contract items (not liabilities unless unpaid), and a balance sheet reports values at a single date (not a one-year period).