Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Classified Balance Sheet Components

Financial Accounting

2. Transaction Analysis

Classified Balance Sheet Components

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Multiple Choice

On a classified balance sheet, which of the following is considered a financing activity?

Purchasing equipment for company use

Issuing common stock to raise capital

Collecting cash from customers for sales

Paying salaries to employees

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Verified step by step guidance

Understand the concept of financing activities: Financing activities are transactions that involve raising capital or returning capital to the owners or creditors of the business. These activities typically include issuing stock, borrowing money, or repaying debt.

Analyze each option provided in the problem: Determine whether each activity falls under financing, investing, or operating activities based on its nature.

Option 1: Purchasing equipment for company use - This is considered an investing activity because it involves acquiring long-term assets for the business.

Option 3: Collecting cash from customers for sales - This is considered an operating activity because it relates to the core business operations of generating revenue.

Option 4: Paying salaries to employees - This is also an operating activity because it pertains to the day-to-day expenses of running the business. Therefore, the correct answer is Option 2: Issuing common stock to raise capital, as it directly involves raising funds for the company, which is a financing activity.