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

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Stock warrants outstanding should be classified as:

Current liabilities

Revenue

Equity

Noncurrent liabilities

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Verified step by step guidance

Understand the concept of stock warrants: Stock warrants are financial instruments that give the holder the right to purchase a company's stock at a specific price before a certain date. They are typically issued by the company itself.

Determine the classification criteria: In financial accounting, stock warrants are classified based on their nature and the rights they confer. They are not obligations to pay cash or provide goods/services, so they are not liabilities.

Eliminate incorrect classifications: Stock warrants are not classified as current liabilities or noncurrent liabilities because they do not represent a debt or obligation. They are also not revenue because they do not arise from the company's core operations or sales activities.

Identify the correct classification: Stock warrants are classified as equity because they represent potential ownership in the company and are tied to the company's capital structure.

Review accounting standards: Confirm the classification of stock warrants as equity by referring to relevant accounting standards, such as IFRS or GAAP, which provide guidelines for the treatment of financial instruments.