Accounting Assets and Liabilities Overview

Questions and Answers

Which of the following are included in Assets? (Select all that apply)

Liabilities

Current Assets (correct)

Property, Plant and Equipment (correct)

Intangible Assets (correct)

Which of the following are classified as Current Assets? (Select all that apply)

Cash (correct)

Inventory (correct)

Land

Preferred Stock

Which of the following are included in Property, Plant and Equipment? (Select all that apply)

Goodwill

Equipment (correct)

Accounts Payable

Buildings (correct)

What is an example of an Intangible Asset?

Goodwill Signup and view all the answers

Which of the following are included in Liabilities and Stockholders' Equity? (Select all that apply)

Long-term Liabilities Signup and view all the answers

Which of the following are classified as Current Liabilities? (Select all that apply)

Accounts Payable Signup and view all the answers

Which of the following are examples of Long-Term Liabilities? (Select all that apply)

Bonds Payable Signup and view all the answers

Which of the following are included in Stockholders' Equity? (Select all that apply)

Common Stock Signup and view all the answers

Study Notes

Assets

Classified into three main categories: Current Assets, Property, Plant and Equipment, and Intangible Assets.

Current Assets

Comprise short-term resources that can be converted into cash within a year.
Include:
- Cash
- Equity Investments
- Notes Receivable
- Income Taxes Receivable
- Inventory
- Prepaid Expenses

Property, Plant and Equipment

Tangible fixed assets essential for business operations.
Items include:
- Land
- Buildings
- Equipment
Depreciation is deducted from both buildings and equipment to reflect their reduced value over time.

Intangible Assets

Non-physical assets contributing to a company's value.
Main component:
- Goodwill, representing the premium paid during acquisitions over the fair value of net identifiable assets.

Liabilities and Stockholders' Equity

Divided into Current Liabilities, Long-term Liabilities, and Stockholders' Equity.

Current Liabilities

Obligations due within one year categorized as:
- Accounts Payable
- Notes Payable
- Payroll Taxes Payable
- Income Taxes Payable
- Rent Payable

Long-Term Liabilities

Represent obligations extending beyond one year, including:
- Notes Payable
- Bonds Payable, with deductions for any discounts on bonds issued.
- Rent Payable, if applicable beyond the current year.

Stockholders' Equity

Reflects the owners' residual interest in the company after liabilities are subtracted.
Components encompass:
- Preferred Stock, offering dividends and priority over common stock holders.
- Common Stock, representing ownership in the company.
- Retained Earnings, accumulated profits not distributed as dividends.

Description

Test your knowledge on the classification of assets and liabilities in accounting. This quiz covers current assets, property, plant and equipment, intangible assets, and the different types of liabilities. Challenge yourself to differentiate between these financial components essential for business operations.