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 are the three primary components found on a classified balance sheet?

Cash, Inventory, and Retained Earnings

Assets, Liabilities, and Equity

Assets, Revenues, and Liabilities

Revenues, Expenses, and Equity

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Verified step by step guidance

Understand the purpose of a classified balance sheet: It is a financial statement that organizes and presents a company's financial position by grouping similar items into categories for clarity and analysis.

Identify the three primary components of a classified balance sheet: These are Assets, Liabilities, and Equity, which represent the company's resources, obligations, and ownership interest respectively.

Clarify why other options are incorrect: For example, 'Cash, Inventory, and Retained Earnings' are specific accounts, not overarching categories. Similarly, 'Assets, Revenues, and Liabilities' and 'Revenues, Expenses, and Equity' mix elements from the income statement with balance sheet components.

Relate Assets, Liabilities, and Equity to the accounting equation: The accounting equation is \( \text{Assets} = \text{Liabilities} + \text{Equity} \), which forms the foundation of the balance sheet structure.

Conclude that the correct answer is 'Assets, Liabilities, and Equity' because these are the fundamental categories used to classify and summarize a company's financial position on a balance sheet.