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 will accounts payable appear on the following financial statements?

As a cash outflow on the statement of cash flows under investing activities

As a current liability on the balance sheet

As an expense on the income statement

As owner's equity on the balance sheet

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Verified step by step guidance

Understand the nature of accounts payable: Accounts payable represents amounts owed by a company to suppliers for goods or services received but not yet paid for. It is classified as a current liability because it is expected to be settled within a short period, typically within one year.

Review the balance sheet classification: Accounts payable is listed under current liabilities on the balance sheet. Current liabilities are obligations that are due within the company's operating cycle or one year, whichever is longer.

Clarify why accounts payable is not an expense on the income statement: Expenses on the income statement represent costs incurred during a specific period, such as rent, salaries, or utilities. Accounts payable is not an expense but rather a liability reflecting unpaid amounts for expenses already incurred.

Explain why accounts payable is not part of owner's equity: Owner's equity represents the residual interest in the assets of the company after deducting liabilities. Since accounts payable is a liability, it reduces the owner's equity rather than being part of it.

Discuss why accounts payable does not appear under investing activities on the statement of cash flows: Investing activities involve transactions related to the acquisition or disposal of long-term assets. Accounts payable is related to operating activities, as it pertains to the day-to-day operations of the business, not investing activities.