1. The balance sheet of Rovers Inc. shows its liabilities and owners' equity as $130,000 and $170,000 respectively. In this case, Rover's _____.

	a.	total income is $40,000
	b.	net cash flow for the current year is $40,000
	c.	net income for the current year is $300,000
	d.	total assets are $300,000

2. If I borrowed the money to buy the asset then the source of financing is considered equity. On the other hand, if the money was invested by owners, I say liability was the source of money to buy the asset.

(hint: think about the accounting equation)

True

False

3. The balance sheet does not reflect the current value or worth of a company. This is considered as one of the shortcomings of the balance sheet.

True

False

4. Revenue is the increase in the assets of a company as a result of what the customers pay for the products/services of that company.

True

False