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

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 items would most likely be classified as a current asset on Armani Company's classified balance sheet?

Land

Goodwill

Accounts Receivable

Bonds Payable

Previous problemNext problem

Verified step by step guidance

Understand the concept of current assets: Current assets are resources 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.

Review the items listed in the problem: Land, Goodwill, Accounts Receivable, and Bonds Payable. Determine whether each item meets the criteria for classification as a current asset.

Analyze 'Land': Land is a long-term asset because it is not expected to be converted into cash or used up within one year. Therefore, it is not classified as a current asset.

Analyze 'Goodwill': Goodwill is an intangible asset that represents the excess of purchase price over the fair value of identifiable net assets acquired in a business combination. It is a long-term asset and not classified as a current asset.

Analyze 'Accounts Receivable': Accounts receivable represents amounts owed to the company by customers for goods or services provided on credit. Since these amounts are typically collected within one year, they are classified as a current asset on the balance sheet.