Table of contents

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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

In preparing a classified balance sheet using a work sheet, in which column is net income recorded?

Income Statement Debit column

Balance Sheet Debit column

Balance Sheet Credit column

Income Statement Credit column

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Verified step by step guidance

Understand the purpose of a classified balance sheet: It organizes assets, liabilities, and equity into categories to provide a clear financial position of the company.

Recognize that net income is derived from the income statement and represents the company's profit for the period.

Net income increases the equity section of the balance sheet because it contributes to retained earnings, which is part of stockholders' equity.

In the work sheet, net income is recorded in the Balance Sheet Credit column because it increases equity, which is a credit account in accounting.

Verify the placement by ensuring that the income statement and balance sheet columns are balanced, reflecting the proper flow of net income into equity.