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

In the chart of accounts, the balance sheet accounts are normally listed in which order?

Assets, Equity, Liabilities

Equity, Assets, Liabilities

Liabilities, Assets, Equity

Assets, Liabilities, Equity

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Verified step by step guidance

Understand the structure of the chart of accounts: The chart of accounts is a listing of all accounts used in the general ledger of a company, categorized into balance sheet accounts and income statement accounts.

Focus on balance sheet accounts: Balance sheet accounts represent the financial position of a company and are divided into three main categories: Assets, Liabilities, and Equity.

Learn the logical order: Balance sheet accounts are listed in the order of liquidity and financial hierarchy. Assets are listed first because they represent resources owned by the company. Liabilities are listed next because they represent obligations owed by the company. Equity is listed last as it represents the residual interest of the owners after liabilities are subtracted from assets.

Memorize the correct sequence: The standard order for balance sheet accounts in the chart of accounts is Assets, Liabilities, and Equity. This order reflects the accounting equation: \( \text{Assets} = \text{Liabilities} + \text{Equity} \).

Apply this knowledge: When organizing or reviewing a chart of accounts, ensure that balance sheet accounts follow the sequence of Assets, Liabilities, and Equity to maintain consistency and alignment with accounting principles.