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

Which of the following accounts is correctly matched with its proper balance sheet classification?

Equipment — Current Asset

Prepaid Rent — Current Liability

Unearned Revenue — Stockholders' Equity

Accounts Receivable — Current Asset

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Verified step by step guidance

Step 1: Understand the classifications of balance sheet accounts. The balance sheet is divided into three main sections: Assets, Liabilities, and Stockholders' Equity. Each account is categorized based on its nature and purpose.

Step 2: Review the definition of 'Current Asset.' Current assets are resources expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer. Examples include cash, accounts receivable, inventory, and prepaid expenses.

Step 3: Analyze the given options: Equipment is classified as a 'Non-Current Asset' because it is a long-term resource used in operations and not expected to be converted into cash within one year. Prepaid Rent is a 'Current Asset' because it represents a payment made in advance for future benefits within the operating cycle. Unearned Revenue is a 'Current Liability' because it represents cash received for services or goods not yet provided.

Step 4: Focus on the correct answer: Accounts Receivable is classified as a 'Current Asset' because it represents amounts owed to the company by customers for goods or services provided, and it is expected to be collected within one year.

Step 5: Conclude that the correct classification is 'Accounts Receivable — Current Asset,' as it aligns with the definition and purpose of current assets on the balance sheet.