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 of the following asset subsections are typically shown on a classified balance sheet?

Cash Equivalents, Marketable Securities, Unearned Revenue

Operating Assets, Non-operating Assets, Deferred Revenue

Current Assets, Long-term Investments, Property, Plant, and Equipment, Intangible Assets

Current Liabilities, Shareholders' Equity, Retained Earnings

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Verified step by step guidance

Step 1: Understand the concept of a classified balance sheet. A classified balance sheet organizes assets, liabilities, and equity into specific categories to provide a clearer financial picture. The main sections typically include Current Assets, Long-term Investments, Property, Plant, and Equipment, Intangible Assets, Current Liabilities, and Shareholders' Equity.

Step 2: Focus on the asset subsections. Assets are resources owned by a company that have economic value. On a classified balance sheet, assets are divided into subsections such as Current Assets (e.g., cash, accounts receivable), Long-term Investments (e.g., stocks, bonds held for more than a year), Property, Plant, and Equipment (e.g., buildings, machinery), and Intangible Assets (e.g., patents, trademarks).

Step 3: Eliminate incorrect options. Unearned Revenue and Deferred Revenue are liabilities, not assets, and therefore do not belong in the asset subsections. Operating Assets and Non-operating Assets are not standard subsections on a classified balance sheet.

Step 4: Identify the correct subsections. The correct asset subsections typically shown on a classified balance sheet are Current Assets, Long-term Investments, Property, Plant, and Equipment, and Intangible Assets. These categories help stakeholders understand the nature and liquidity of the company's resources.

Step 5: Relate the asset subsections to the overall structure of the balance sheet. Assets are listed first, followed by liabilities and shareholders' equity. This structure ensures that the balance sheet adheres to the accounting equation: Assets = Liabilities + Shareholders' Equity.