1.

In analyzing financial statements, which financial statement would a potential investor primarily use to
assess liquidity and financial flexibility?
Statement of financial position
2. Which is an essential characteristic of an asset?
The asset is a present economic resource
The claims to the benefits are legally enforceable
An asset is tangible
An asset is obtained at a cost
3. Conceptually, asset valuation accounts are
Neither assets nor liabilities
Assets
Part of shareholders' equity
Liabilities
4. Working capital is
Current assets less current liabilities
5. The basis for qualifying assets as current or noncurrent is the period of time normally elapsed from the
time the entity expends cash to the time it converts
Inventory back into cash or 12 months, whichever is longer