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Q7(10)PSA

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Financial & Managerial Accounting
Found in: Page 154
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets

B. Long-term investments

C. Plant assets

D. Intangible assets

E. Current liabilities

F. Long-term liabilities

G. Equity

10. Common stock

The correct answer is G, Equity.

See the step by step solution

Step by Step Solution

Definition of common stock

Common stock shows the ownership rights of the holders of shares. It shows how much capital has been invested in the organization by the owners in a specific accounting period.

Reason of choice

Common stock shows the invested capital, so it should be disclosed under equity section to show the total shareholder’s fund of the organization.

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