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

Which group of accounts is composed of only assets?

Service Revenue, Cash, Retained Earnings

Prepaid Expenses, Equipment, Accumulated Depreciation

Accounts Payable, Notes Payable, Common Stock

Cash, Accounts Receivable, Inventory

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Verified step by step guidance

Step 1: Understand the definition of assets. Assets are resources owned by a company that have economic value and are expected to provide future benefits. Examples include cash, accounts receivable, inventory, prepaid expenses, and equipment.

Step 2: Analyze each group of accounts provided in the problem to determine whether they consist solely of assets. For example, Service Revenue and Retained Earnings are not assets; they are revenue and equity accounts, respectively.

Step 3: Examine the second group: Prepaid Expenses, Equipment, and Accumulated Depreciation. Prepaid Expenses and Equipment are assets, but Accumulated Depreciation is a contra-asset account, which reduces the value of assets. Therefore, this group does not consist solely of assets.

Step 4: Review the third group: Accounts Payable, Notes Payable, and Common Stock. Accounts Payable and Notes Payable are liabilities, and Common Stock is an equity account. This group does not consist solely of assets.

Step 5: Confirm the correct answer: Cash, Accounts Receivable, and Inventory. All three are assets because they represent resources owned by the company that provide future economic benefits.