Question

If a business has $10,000 cash on hand, $25,000 in a checking account and land valued at $300,000, on which line of a financial statement should the $335,000 total be entered?

Answer 1

The total of $335,000 should be reflected in the assets section of the business's balance sheet, with cash and checking account balances counted as liquid assets and land as fixed assets.

Step-by-step explanation:

If a business has $10,000 cash on hand, $25,000 in a checking account, and land valued at $300,000, the total of $335,000 should be entered on the balance sheet under the assets section. The balance sheet is a financial statement that presents a company's financial position at a specific point in time, including its assets, liabilities, and owner's equity. In this case, cash on hand and the funds in the checking account are considered liquid assets because they are readily available for use. Conversely, the land is a fixed asset as it is not as easily converted to cash but nonetheless represents value for the business. The total assets, including both liquid and fixed assets, amount to $335,000, which should be reflected on the balance sheet to provide insight into the company's financial resources.