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Basic Question 8 of 12
Which of the following statement(s) is (are) false?
II. Working capital = Current assets - Current liabilities
III. In a classified balance sheet, current assets are listed in alphabetical order.
I. The operating cycle can be any 12-month period.
II. Working capital = Current assets - Current liabilities
III. In a classified balance sheet, current assets are listed in alphabetical order.
User Contributed Comments 8
| User | Comment |
|---|---|
| Maxence | Can someone explain me what is the difference between the statement and the answer for II? |
| mtcfa | There is no difference. The explanation uses the word "over" but this should not be taken to mean "divided by." For simplicity it should say the difference between ca and cl. |
| push | why not II ? |
| NufaNka | Because II is true. |
| viannie | I got caught again! because I didn't read this question carefully!!! I read it as 'which is true; ;(( |
| johntan1979 | Unclassified balance sheet = No separation of current and long-term Allowed by US GAAP for certain industries e.g. banks, financial institutions. |
| ascruggs92 | I is true, a lot of companies do not use the calendar year as their Fiscal Year. In fact, the biggest company in the world, Apple, uses Sept. 30th as their year end. To me it would be wrong if it said it "has to be" any 12 month period, because an operating cycle can last more than a year |
| cschulz316 | Yes I is correct. An operating cycle CAN be any 12 month period, it doesn't have to be though. |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
calculate and interpret common-size balance sheets and related financial ratios
CFA® 2025 Level I Curriculum, Volume 2, Module 3.