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

1. Introduction to Accounting

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

How would 'Accounts Receivable' typically be reported on the balance sheet?

As a current liability

As a non-current liability

As a current asset

As owner's equity

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Verified step by step guidance

Understand the nature of 'Accounts Receivable': It represents amounts owed to the company by customers for goods or services provided on credit. This is considered an asset because it is expected to bring future economic benefits.

Determine the classification of 'Accounts Receivable': Since it is expected to be collected within a short period, typically within one year, it is classified as a current asset on the balance sheet.

Review the definition of current assets: Current assets are resources that are expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Compare 'Accounts Receivable' to other balance sheet categories: It is not a liability (current or non-current) because it does not represent an obligation. It is also not part of owner's equity, which reflects the residual interest in the assets of the entity after deducting liabilities.

Conclude the reporting placement: 'Accounts Receivable' is reported under the 'Current Assets' section of the balance sheet, typically listed after 'Cash and Cash Equivalents' and before 'Inventory'.