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 which financial statement does a business list the building in which it does business?

Statement of Retained Earnings

Income Statement

Balance Sheet

Statement of Cash Flows

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Understand the purpose of each financial statement: The Balance Sheet reports a company's assets, liabilities, and equity at a specific point in time. The Income Statement shows revenues and expenses over a period. The Statement of Retained Earnings explains changes in retained earnings. The Statement of Cash Flows details cash inflows and outflows.

Identify the nature of the item in question: A building is a long-term asset because it is a physical resource owned by the business that provides future economic benefits.

Determine where long-term assets are reported: Long-term assets, such as buildings, are listed under the 'Assets' section of the Balance Sheet.

Eliminate other options: The Income Statement does not report assets; it focuses on revenues and expenses. The Statement of Retained Earnings tracks changes in retained earnings, not physical assets. The Statement of Cash Flows reports cash transactions, not the value of assets like buildings.

Conclude that the building is listed on the Balance Sheet under the 'Assets' section, typically categorized as 'Property, Plant, and Equipment (PP&E)'.