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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following is classified as a noncurrent asset on the balance sheet?

Accounts Receivable

Land

Inventory

Cash and Cash Equivalents

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the classification of assets on the balance sheet. Assets are divided into current and noncurrent categories based on their liquidity and expected usage timeframe. Current assets are expected to be converted into cash or used up within one year, while noncurrent assets are long-term resources that are not expected to be liquidated within a year.

Step 2: Review the definitions of the options provided: - Accounts Receivable: Represents amounts owed to the company by customers, typically collected within a year, making it a current asset. - Inventory: Refers to goods available for sale or production, usually sold or used within a year, classifying it as a current asset. - Cash and Cash Equivalents: Includes cash and highly liquid investments, which are immediately available for use, making them current assets. - Land: Represents property owned by the company, which is not expected to be sold or consumed within a year, classifying it as a noncurrent asset.

Step 3: Identify the key characteristic of noncurrent assets. Noncurrent assets are typically long-term investments or resources that provide value over an extended period, such as property, equipment, or intangible assets.

Step 4: Compare the options against the definition of noncurrent assets. Land fits the criteria of a noncurrent asset because it is a long-term resource that is not expected to be liquidated or used up within one year.

Step 5: Conclude that Land is classified as a noncurrent asset on the balance sheet, while Accounts Receivable, Inventory, and Cash and Cash Equivalents are classified as current assets.