Explanation Assets: Assets refer to those items that are owned by the company or business itself, which increases the net worth of the company and which has direct relationship with the profitability and stability of the company. Liabilities: Liabilities refer to those items that are owed by the company from outsiders or from shareholders, which decreases the net worth of the company and which has indirect relationship with the profitability or stability of the company. Equity: Equity refers to the amount of funds contributed by the shareholders (owners) of the company for use in the various business transactions. Unearned revenues refer to those revenues for which the company has not provided its services. So, it is a liability for a company until it provides its services for such amount, and the services can be paid within one year so, it is a current liability. Cash equivalents are short term investments that can easily be converted into cash within one year. So, it is current asset. Investment in debt instrument is the investment owned by the company which increases the profitability of the company...

1st Edition

ISBN: 9780132162302

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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Chapter 6, Problem 6.4E

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To classify: The given accounts in assets, liability and equity.

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Chapter 6, Problem 6.3E

Chapter 6, Problem 6.5E

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The following are the typical classifications used in a statement of financial position : a. Current assets b. Investments and funds c. Property, plant, and equipment d. Investment property e. Intangible assets f. Current liabilities g. Long-term liabilities h. Issued capital i. Retained earnings Required : For each of the following statements of financial position items. use the letters above to indicate the appropriate classification category. If the item is a contra account, place a minus before the chosen letter 3. ………. Unearned rent revenue 4. ……….. Income less dividends, accumulated 5. ………. Building, in use

The following are the typical classifications used in a statement of financial position : a. Current assets b. Investments and funds c. Property, plant, and equipment d. Investment property e. Intangible assets f. Current liabilities g. Long-term liabilities h. Issued capital i. Retained earnings Required : For each of the following statements of financial position items. use the letters above to indicate the appropriate classification category. If the item is a contra account, place a minus before the chosen letter 1. …. .…….Prepaid insurance 2. ……….. Note payable due in three months 3. ………. Unearned rent revenue 4. ……….. Income less dividends, accumulated 5. ………. Building, in use

The following are the typical classifications used in a statement of financial position : a. Current assets b. Investments and funds c. Property, plant, and equipment d. Investment property e. Intangible assets f. Current liabilities g. Long-term liabilities h. Issued capital i. Retained earnings Required : For each of the following statements of financial position items. use the letters above to indicate the appropriate classification category. If the item is a contra account, place a minus before the chosen letter 1. …. .…….Prepaid insurance 2. ……….. Note payable due in three months

Chapter 6 Solutions

Intermediate Accounting

Ch. 6 - What are the limitations of the balance sheet?Ch. 6 - What does a firms liquidity measure?Ch. 6 - Prob. 6.3Q Ch. 6 - What are the four major components of stockholders...Ch. 6 - Prob. 6.5Q Ch. 6 - Prob. 6.6Q Ch. 6 - Where is accumulated other comprehensive income...Ch. 6 - Prob. 6.8Q Ch. 6 - Prob. 6.9Q Ch. 6 - What are the two main balance sheet formats?...

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To classify: The given accounts in assets, liability and equity.

Solution Summary: The author explains the classification of assets, liabilities, and equity.

To classify: The given accounts in assets, liability and equity.

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Chapter 6 Solutions