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Classification of accounts for the balance sheet, income sta

How many of the following balance sheet items are classified as current?

Retained earnings
Accounts payable
Plant and equipment
Inventory
Common stock
Bonds payable
Accrued wages payable
Accounts receivable
Preferred stock

1) 3 of these items are classified as current
2) 4 of these items are classified as current
3) 5 of these items are classified as current
4) 6 of these items are classified as current

How many of the following items are found on the income statement, rather than the balance sheet?

* Sales
* Notes payable (6 months)
* Bonds payable, maturity 2001
* Common stock
* Depreciation expense
* Inventories
* Capital in excess of par value
* Net income (earnings after taxes)
* Income tax payable

1) 2 of these items are found on the income statement
2) 3 of these items are found on the income statement
3) 4 of these items are found on the income statement
4) 5 of these items are found on the income statement

How many of the following items decrease cash flow in the Statement of Cash flows?

* Increase in accounts receivable
* Increase in notes payable
* Depreciation expense
* Increase in investments
* Decrease in accounts payable
* Decrease in prepaid expenses
* Dividend payment
* Increase in accrued expenses

1) 2 of these items decrease cash flow
2) 3 of these items decrease cash flow
3) 4 of these items decrease cash flow
4) 5 of these items decrease cash flow

Solution Preview

See my notes next to each account so that you can learn about each one and select the correct answers...

How many of the following balance sheet items are classified as current?

Retained earnings - no, equity section which doesn't have current/noncurrent sections
Accounts payable - yes
Plant and equipment - long term
Inventory - yes
Common stock - equity (see above)
Bonds payable - usually long term but could have current portion in a particular year if you are given specific details about this
Accrued wages payable - yes
Accounts receivable - yes
Preferred stock - equity again!

1) 3 of these items are classified as current
2) 4 of these items are classified as current
3) 5 of these items are classified as current
4) 6 of ...

Solution Summary

This solution guides the student in the details of classified balance sheets and how individual accounts are reported.

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