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    Classification of accounts for the balance sheet, income sta

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    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

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    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.

    $2.19

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