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

How should assets be reported on a personal balance sheet?

At their current fair market value

At their estimated future value

At the amount of cash received from selling them

At their original purchase cost

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Verified step by step guidance

Understand the purpose of a personal balance sheet: It is a financial statement that provides a snapshot of an individual's financial position at a specific point in time, listing assets, liabilities, and net worth.

Recognize that assets on a personal balance sheet are reported at their current fair market value. This is the price at which the asset could be sold in the open market as of the balance sheet date.

Eliminate incorrect options: Assets are not reported at their estimated future value because this is speculative and not reflective of the current financial position. Similarly, they are not reported at the amount of cash received from selling them, as this would only apply if the asset were already sold. Lastly, they are not reported at their original purchase cost because this does not account for changes in value over time.

Understand the concept of fair market value: Fair market value represents the price that a willing buyer and a willing seller would agree upon in an open market, assuming both parties have reasonable knowledge of the asset and are not under duress to buy or sell.

Conclude that assets should be reported at their current fair market value on a personal balance sheet, as this provides the most accurate and relevant representation of an individual's financial position.