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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is a proper income statement classification of contingent events?

Contingent events are classified as extraordinary gains.

Contingent events are not recognized on the income statement until they are realized or become probable and estimable.

Contingent events are included under operating expenses.

Contingent events are always reported as revenues.

Previous problemNext problem

Verified step by step guidance

Understand the concept of contingent events: Contingent events are potential liabilities or gains that depend on the occurrence or non-occurrence of future events. They are not guaranteed and require specific conditions to be met before recognition.

Review the accounting treatment for contingent events: According to accounting standards (e.g., GAAP or IFRS), contingent events are not recognized in the financial statements unless they are probable and the amount can be reasonably estimated.

Analyze the income statement classifications: The income statement reports realized revenues, expenses, gains, and losses. Contingent events do not meet the criteria for recognition until they are realized or become probable and estimable.

Eliminate incorrect options: Extraordinary gains are rare and unusual, but contingent events are not classified as such. Contingent events are not included under operating expenses or always reported as revenues because they are not recognized until certain conditions are met.

Conclude the correct classification: Contingent events are not recognized on the income statement until they are realized or become probable and estimable, as this aligns with accounting principles and ensures accurate financial reporting.