BUSINESS - FINANCIAL STATEMENTS

Balance Sheet Practice Questions

  • Focuses on classifying assets and liabilities in financial statements
  • Covers real-world business scenarios for practical understanding
  • Emphasizes understanding of short-term and long-term financial obligations
  • Designed for Grade 9 students with a challenging difficulty level

Here are the first 3 questions. Click “View all questions” to see the complete assessment.

Q1.

A bakery owns an oven used for production, holds bags of flour, is owed money by a café customer, and has an amount owed to a flour supplier that must be paid next month. Which classification sequence is correct for these four items?

  1. A) Current asset; non-current asset; current liability; current asset
  2. B) Non-current asset; current asset; current asset; current liability
  3. C) Non-current asset; current asset; non-current asset; non-current liability
  4. D) Current asset; current asset; current liability; non-current liability

Q2.

At its year end, a business has a bank loan of $60,000. It must repay $12,000 during the next 12 months and the remaining $48,000 after three years. How should the loan be classified?

  1. A) $12,000 as a current asset and $48,000 as a non-current liability
  2. B) The entire $60,000 as a non-current liability
  3. C) The entire $60,000 as a current liability
  4. D) $12,000 as a current liability and $48,000 as a non-current liability

Q3.

A design company has a software licence that it will use for four years, insurance paid in advance for the next six months, and an unpaid electricity bill due next week. How should these items be classified, in order?

  1. A) Non-current asset; current asset; current liability
  2. B) Current liability; current asset; non-current liability
  3. C) Current asset; non-current asset; current liability
  4. D) Non-current asset; current liability; current asset

Q4.

A property development business owns an office building used by its employees and three newly built houses intended for sale to customers. Which classification is correct?

  1. A) Both the office building and the houses are non-current assets
  2. B) The office building is a current asset, while the houses are non-current assets
  3. C) The office building is a non-current asset, while the houses are current assets
  4. D) Both the office building and the houses are current assets

Q5.

A hotel receives a deposit for a conference that will take place in three months. It is also waiting to receive payment from a guest who has already completed a stay. How should the deposit and the amount owed by the guest be classified?

  1. A) The deposit is a current liability, and the amount owed by the guest is a current asset
  2. B) The deposit is a non-current liability, and the amount owed by the guest is a non-current asset
  3. C) Both items are current assets
  4. D) The deposit is a current asset, and the amount owed by the guest is a current liability

Q6.

At the reporting date, a manufacturer's loan is contractually due for repayment in 15 months. No part of it is payable before then. Which classification should be used?

  1. A) Current asset, because the business originally received cash from the bank
  2. B) Non-current asset, because the finance supports long-term operations
  3. C) Current liability, because every bank loan is a current liability
  4. D) Non-current liability, because repayment is due more than 12 months after the reporting date

Q7.

A vehicle dealer owns a tow truck used to recover customers' vehicles and ten new cars held for sale. It also owes the car manufacturer for stock delivered on 30-day credit. Which classification is correct?

  1. A) Tow truck: current asset; new cars: current assets; manufacturer debt: non-current liability
  2. B) Tow truck: current asset; new cars: non-current assets; manufacturer debt: current liability
  3. C) Tow truck: non-current asset; new cars: current assets; manufacturer debt: current liability
  4. D) Tow truck: non-current asset; new cars: current assets; manufacturer debt: non-current liability

Q8.

A business has machinery, a positive cash balance, a bank overdraft repayable on demand, and a five-year debenture. Which option classifies all four items correctly?

  1. A) Machinery: current asset; cash: non-current asset; overdraft: current liability; debenture: non-current liability
  2. B) Machinery: current asset; cash: current asset; overdraft: current liability; debenture: current liability
  3. C) Machinery: non-current asset; cash: current asset; overdraft: non-current liability; debenture: current liability
  4. D) Machinery: non-current asset; cash: current asset; overdraft: current liability; debenture: non-current liability

Q9.

Study the four labelled business items in the figure. Which option gives the correct classification of P, Q, R and S, in that order?

Diagram for question 9: Study the four labelled business items in the figure. Which option gives the correct classification of P, Q…
  1. A) Non-current asset; current asset; non-current liability; current liability
  2. B) Current asset; current liability; current asset; non-current liability
  3. C) Non-current asset; current asset; current liability; non-current liability
  4. D) Current asset; non-current asset; current liability; non-current liability

Q10.

Use the reporting date and payment timeline in the figure. How should liabilities L, M and N be classified, in that order?

Diagram for question 10: Use the reporting date and payment timeline in the figure. How should liabilities L, M and N be classified…
  1. A) Non-current liability; non-current liability; current liability
  2. B) Current liability; non-current liability; current liability
  3. C) Current liability; current liability; non-current liability
  4. D) Non-current liability; current liability; current liability

What this assessment covers

Concepts tested

  • Classification of current and non-current assets
  • Understanding of liabilities and their classifications
  • Differentiation between short-term and long-term obligations
  • Recognition of prepaid expenses and accrued liabilities
  • Identification of tangible and intangible assets

Question Mix

  • Hard questions included

Skills you build

  • Classify business assets and liabilities accurately
  • Interpret financial data in business contexts
  • Apply accounting principles to real-world scenarios
  • Analyze financial obligations based on timeframes
  • Evaluate business transactions for financial reporting

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