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

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

In retail businesses, how is inventory typically reported on the financial statements?

As a non-current asset on the balance sheet

As revenue on the income statement

As a current asset on the balance sheet

As a liability on the balance sheet

Previous problemNext problem

Verified step by step guidance

Understand the concept of inventory: Inventory refers to goods available for sale or raw materials used to produce goods for sale. It is considered an asset because it represents economic resources owned by the business.

Identify the classification of inventory: Inventory is classified as a current asset because it is expected to be sold, used, or converted into cash within one year or the operating cycle of the business.

Locate inventory on the financial statements: Inventory is reported on the balance sheet under the 'Current Assets' section, alongside other short-term assets like cash, accounts receivable, and prepaid expenses.

Recognize why inventory is not reported elsewhere: Inventory is not revenue because it has not yet been sold, nor is it a liability because it does not represent an obligation. It is also not a non-current asset because it is intended for short-term use or sale.

Review the importance of accurate inventory reporting: Proper classification and valuation of inventory are crucial for financial analysis, as they impact the calculation of key metrics like working capital and the cost of goods sold (COGS) on the income statement.