Accounting Classification Flashcards

Questions and Answers

What is the classification of Current Liability?

Classification of Cash

Classification of Accounts Receivable

Classification of Inventory

Classification of Accounts Payable (correct)

What is the classification of Current Asset?

Classification of Fixed Assets

Classification of Long-Term Investments

Classification of Accounts Receivable (correct)

Classification of Accounts Payable

What is the classification of Plant Asset—Contra?

Classification of Accounts Payable

Classification of Accumulated Depreciation—Buildings (correct)

Classification of Cash

Classification of Income Revenue

What is the classification of Operating Expense related to Advertising?

Classification of Advertising Expense Signup and view all the answers

What does Current Asset—Contra classify?

Classification of Allowance for Doubtful Accounts Signup and view all the answers

What is classified as a Long-Term Liability?

Classification of Bonds Payable Signup and view all the answers

What type of account is classified as Operating Expense?

Classification of Depreciation Expense Signup and view all the answers

What is the classification of Intangible Asset?

Classification of Copyright Signup and view all the answers

Which classification refers to Owner's Equity?

Classification of Owner's Capital Signup and view all the answers

What is the classification of Current Liability related to Salaries?

Classification of Salaries and Wages Payable Signup and view all the answers

What category does Income Tax Expense belong to?

Classification of Income Tax Expense Signup and view all the answers

What does the classification of Temporary account closed to Retained Earnings refer to?

Classification of Income Summary Signup and view all the answers

What is the classification of Cash?

Current Asset Signup and view all the answers

What is the classification of Dividends?

Temporary account closed to Retained Earnings Signup and view all the answers

What is the classification of Common Stock?

Stockholder's Equity Signup and view all the answers

What is the classification of Cash?

Current Asset Signup and view all the answers

Match the following classifications with their definitions:

Current Liability = Classification of Accounts Payable Current Asset = Classification of Accounts Receivable Long-Term Liability = Classification of Bonds Payable Operating Expense = Classification of Advertising Expense Signup and view all the answers

Study Notes

Account Classifications Overview

Current Liability: Represents obligations due within one year such as Accounts Payable, Income Taxes Payable, Dividends Payable, and Salaries and Wages Payable.
Current Asset: Assets expected to be converted to cash or consumed within one year, including Cash, Accounts Receivable, Inventory, Supplies, and Prepaid Expenses.
Long-Term Liability: Obligations due beyond one year, exemplified by Bonds Payable and Mortgage Payable.
Plant Assets: Long-term tangible assets utilized in operations, categorized as Buildings, Equipment, Land, and considered with Accumulated Depreciation.
Operating Expense: Costs incurred during regular business operations, such as Advertising Expense, Depreciation Expense, and Utilities Expense.
Stockholder's Equity: Represents ownership equity in the company, including Common Stock, Preferred Stock, Retained Earnings, and Paid-in Capital.
Intangible Asset: Non-physical assets with a long-term benefit, such as Copyrights, Goodwill, and Patents.
Other Income and Expense: Includes unique transactions not classified under main categories, such as Gain on Disposal of Plant Assets and Interest Expense.
Revenue: Income generated from primary business activities, categorized as Sales Revenue, Service Revenue, with contra-revenue accounts like Sales Discounts and Sales Returns.

Additional Classes for Contra Accounts

Current Asset—Contra: Accounts that reduce the value of reported current assets, exemplified by Allowance for Doubtful Accounts.
Long-Term Liability—Contra: Related to long-term debts, represented by Discount on Bonds Payable and Premium on Bonds Payable.
Revenue—Contra: Reductions to total revenue indicating discounts or returns, including Sales Discounts and Sales Returns and Allowances.

Special Account Classifications

Temporary Accounts: Accounts that reset each accounting period, including Dividends and Income Summary, which eventually close to Retained Earnings or Owner's Capital.
Owner's Equity: Includes Owner's Capital and Owner's Drawings, depicting the owner's stake and transactions for personal withdrawals.

Key Financial Classification Takeaways

Each classification serves an essential role in presenting the financial status and performance of a business.
Understanding these classifications is crucial for financial reporting, analysis, and decision-making.

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Description

Test your knowledge of accounting classifications with this set of flashcards. Each card features a key accounting term along with its definition, covering various aspects like current liabilities, assets, and operating expenses. Perfect for students and professionals looking to reinforce their understanding of fundamental accounting concepts.