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 items cannot be found on a firm's balance sheet under current liabilities?

Accrued Expenses

Accounts Payable

Notes Payable (due in 2 years)

Unearned Revenue

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Verified step by step guidance

Step 1: Understand the concept of current liabilities. Current liabilities are obligations that a company expects to settle within one year or within its operating cycle, whichever is longer. Examples include accounts payable, accrued expenses, and unearned revenue.

Step 2: Review each item listed in the problem and determine whether it meets the definition of a current liability. For example, accrued expenses are short-term obligations, accounts payable are amounts owed to suppliers, and unearned revenue represents payments received for goods or services not yet delivered.

Step 3: Analyze the item 'Notes Payable (due in 2 years).' Since this obligation is due in more than one year, it does not meet the definition of a current liability. Instead, it would be classified as a long-term liability on the balance sheet.

Step 4: Confirm that the other items (Accrued Expenses, Accounts Payable, and Unearned Revenue) are indeed current liabilities because they are expected to be settled within one year or the operating cycle.

Step 5: Conclude that 'Notes Payable (due in 2 years)' cannot be found under current liabilities on the firm's balance sheet because it is classified as a long-term liability.