Question

The asset/liability approach emphasizes: Multiple Choice Whether amounts on the balance sheet meet the definitions of assets and liabilities. A close relation between the balance sheet and the statement of cash flows. The distinction between net assets and gross assets. All of these answer choices are correct.

Answer 1

Whether amounts on the balance sheet meet the definitions of assets and liabilities

Step-by-step explanation:

The asset/liability approach emphasizes whether amounts on the balance sheet meet the definitions of assets and liabilities. It is a process of managing the use of assets and cash flows to reduce the firm's risk of loss from not paying a liability on time. Well-managed assets and liabilities increase business profits. A contract generates assets and liabilities, and the goal is to depict them in the statement of financial position.