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

1. Introduction to Accounting

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

Which of the following represents the correct order to present current assets on a classified balance sheet?

Cash, Accounts Receivable, Inventory, Prepaid Expenses

Inventory, Prepaid Expenses, Accounts Receivable, Cash

Accounts Receivable, Cash, Inventory, Prepaid Expenses

Prepaid Expenses, Inventory, Cash, Accounts Receivable

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Verified step by step guidance

Understand the concept of current assets: Current assets are assets that are expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer. Examples include cash, accounts receivable, inventory, and prepaid expenses.

Learn the order of liquidity: Current assets are presented on a classified balance sheet in the order of liquidity, which refers to how quickly they can be converted into cash. The most liquid asset is listed first.

Identify the liquidity of each asset: Cash is the most liquid asset, followed by accounts receivable (amounts owed by customers), inventory (goods available for sale), and prepaid expenses (payments made in advance for goods or services).

Apply the order of liquidity to arrange the assets: Based on the liquidity principle, the correct order is Cash, Accounts Receivable, Inventory, Prepaid Expenses.

Review the options provided in the problem and select the one that matches the correct order of liquidity: Compare the options to ensure the correct sequence is chosen.