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Solutions

Multiple Choice Questions - Solutions​

  1. Which financial statement shows a business's financial position at a specific point in time?

    • Answer: c) The Balance Sheet shows assets, liabilities, and equity at a specific date.

  2. Net Income from the Income Statement flows into which statement?

    • Answer: b) Net Income flows into the Statement of Owner's Equity, which then flows to the Balance Sheet.

  3. In Luxembourg, which PCN class contains cash and bank accounts?

    • Answer: c) Class 5 contains financial accounts (cash and banks).

  4. A company's accounts receivable would be classified as:

    • Answer: a) Accounts receivable are expected to be collected within one year, making them a current asset.

  5. In Luxembourg, what is the minimum share capital required for a SARL?

    • Answer: b) A SARL requires minimum share capital of €12,000.

  6. Which PCN class contains expense accounts?

    • Answer: c) Class 6 contains all expense accounts.

  7. If a business has €50,000 in assets and €30,000 in liabilities, what is its equity?

    • Answer: a) Equity = Assets - Liabilities = €50,000 - €30,000 = €20,000.

  8. Revenue accounts in Luxembourg PCN are classified in:

    • Answer: c) Class 7 contains all revenue accounts.

  9. A bank loan due in 18 months would be classified as:

    • Answer: d) A loan due after one year is a noncurrent liability.

  10. In Luxembourg, annual accounts must be filed with RCS within how many months of the fiscal year end?

  • Answer: c) Annual accounts must be filed within 7 months of fiscal year end.

Note: Solutions will be provided in a separate solutions manual. For now, students should work through problems and cases, then compare with instructor-provided solutions or discuss in class.