[maizy886]

I'm stuck on two self-review questions and would like to know if I have the correct concept. Thank you.

Is a business with no cash considered insolvent? Yes or No
My answer is no, because the business could have assets that can be turned into cash if needed.


Do balance sheets report profitability? Yes or No?
My answer is no, because it shows A=L+C and shows owners’ equity not if the company is profitable.

Am I on the right track?

Thanks,
Cali

[pready]

You are on the right track.

[rehmanvohra]

Is a business with no cash considered insolvent? Yes or No
My answer is no, because the business could have assets that can be turned into cash if needed. CORRECT

A business is considered insolvent if it is unable to meet its obligations.

Do balance sheets report profitability? Yes or No?
My answer is no, because it shows A=L+C and shows owners' equity not if the company is profitable. CORRECT

Profitability is shown by the income statement

[maizy886]

Great thank you!!

I have a few more questions if you don't mind.

Are all general ledger accounts adjusted and closed at the end of the accounting cycle?
My answer, no because all temporary accounts are closed. I'm slightly confused on this one.

Does FIFO leave the most recent cost in inventory?
My answer no. I think LIFO leaves the most recent cost in inventory.

Thanks again!

[rehmanvohra]

Are all general ledger accounts adjusted and closed at the end of the accounting cycle?
My answer, no because all temporary accounts are closed. I'm slightly confused on this one.
Correct

Does FIFO leave the most recent cost in inventory?
My answer no. I think LIFO leaves the most recent cost in inventory.
Incorrect. I have already answered in your other post.