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Questions and Answers
What is classified as a current asset when it is expected to trade within one year?
What is the classification for 'Debt Investment' if it is readily marketable?
Current Asset
How should treasury stock be accounted for according to the cost basis?
Reduction of Total Stockholders' Equity
What type of liability is 'Dividends Payable'?
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What does 'Accumulated Depreciation—Equipment' represent?
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If the warehouse under construction is for another party, it should be classified as an ______.
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What type of asset is 'Petty Cash'?
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What type of liability is 'Interest Payable'?
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What is the classification for 'Deficit'?
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What type of account is 'Income Taxes Payable'?
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What should 'Unearned Subscription Revenue' be classified as?
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What type of asset is 'Work in Process'?
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What is 'Salaries and Wages Payable' classified as?
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Which of the following are considered current assets? (Select all that apply)
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Which of these is classified as noncurrent liabilities? (Select all that apply)
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What is included in 'Current Liabilities'?
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What are included in 'Capital Stock'? (Select all that apply)
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What does 'Intangible Assets' include?
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Study Notes
Debt Investments
- Debt investments (bonds) are considered current assets if they are readily marketable and primarily held for short-term trading to generate income from price differences.
- Available-for-sale securities are classified as current or noncurrent based on specific circumstances.
Treasury Stock
- Treasury stock accounted for on the cost basis is shown as a reduction of total stockholders' equity.
Common Stock
- Represents an aspect of stockholders' equity in a company's balance sheet.
Dividends Payable
- Classified as a current liability, indicating obligations to distribute profits to shareholders.
Accumulated Depreciation - Equipment
- Shown as a deduction within property, plant, and equipment.
Construction in Process
- Classified as inventory if under construction for another party, shown net of any billing for the contract.
- If constructed for the company's own use, it is classified as a separate item in property, plant, and equipment.
Petty Cash
- Recognized as a current asset, representing small amounts of cash on hand for operational expenses.
Interest Payable
- Categorized as a current liability, indicating amounts owed for interest payments.
Deficit
- Represents retained earnings that indicate a negative balance in shareholders' equity.
Equity Investment (Ownership Stake of Less Than 20%)
- Recognized as a current asset if expected to be traded within one year.
Income Taxes Payable
- Classified as a current liability for taxes owed by the company.
Unearned Subscription Revenue
- Considered a current liability as it reflects payment received in advance for service obligations not yet fulfilled.
Work in Process
- Represents a current asset that falls under inventory, reflecting incomplete goods in production.
Salaries and Wages Payable
- Listed as a current liability representing unpaid salaries and wages to employees.
Current Assets
- Comprises various items such as equity investments (trading), allowance for doubtful accounts, accounts receivable, supplies, inventory, and prepaid insurance.
Investment
- Includes items like cash surrender value of life insurance and bond sinking funds.
Property, Plant, and Equipment
- Encompasses significant assets such as buildings and land.
Intangible Assets
- Primarily includes goodwill, representing non-physical business value.
Current Liabilities
- Consists of salaries and wages payable, accounts payable, current maturity of long-term debt, notes payable (due the following year), and income tax payable.
Noncurrent Liabilities
- Includes items like premium on bonds payable and bonds payable, representing long-term financial obligations.
Capital Stock
- Encompasses different forms of stock including preferred stock and common stock within equity.
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Description
Test your knowledge on balance sheet account classifications through flashcards. This quiz covers terms like debt investments and treasury stock, providing definitions to enhance your understanding of current and noncurrent assets.
