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

The order in which liabilities are reported on the balance sheet is based on when the liability is:

due to be settled

incurred during the period

approved by management

recorded in the accounting system

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Verified step by step guidance

Understand the concept of liabilities: Liabilities are obligations that a company owes to external parties, typically arising from past transactions or events. They are reported on the balance sheet to show the company's financial position.

Learn the classification of liabilities: Liabilities are categorized into current liabilities (due within one year) and non-current liabilities (due after one year). This classification is based on the timing of settlement.

Focus on the reporting order: The order in which liabilities are reported on the balance sheet is determined by their due date. Current liabilities are listed first, followed by non-current liabilities. This helps users of financial statements understand the company's short-term and long-term obligations.

Clarify the correct criterion: The reporting order is based on when the liability is 'due to be settled,' not when it is incurred, approved, or recorded. This ensures that the balance sheet reflects the timing of cash outflows or other settlements.

Apply this understanding: When preparing or analyzing a balance sheet, always prioritize liabilities based on their settlement due date to ensure accurate financial reporting and compliance with accounting standards.