courses › Accounting

Sort what the business owns, owes, and keeps, on one date.

In your head, jot if needed · no calculator why?

Learn first (about 3 minutes)

Opens at level 20.

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Builds on: The Accounting Equation (not open yet)

skills · practice stats

From rounds of this course only: box, review and trial answers are left out. Once a skill has 40 tries, it compares your first 20 tries with your last 20.

• Asset, liability, or equity? par 9 s not tried yet

  worked example

  Equipment the business owns and uses. Where does this belong?

  1. Liability
  2. Asset
  3. Not on the balance sheet (a P&L item)
  4. Equity

  Answer: Asset

  1. Equipment: an asset (something the business owns).
  2. Assets are things owned, liabilities are amounts owed (including work you owe customers), and equity is the owners' claim. Revenue and expenses live on the P&L.

• Add up the assets par 18 s not tried yet

  worked example

  This month's revenue $3,250; wages payable $700; accounts receivable $4,450; equipment $27,850; loan payable $19,900. What are total assets?

  Answer: $32,300.00

  1. Add only the assets: $4,450 + $27,850 = $32,300.
  2. Leave out this month's revenue (a P&L item), wages payable (a liability) and loan payable (a liability).

• Current or long-term? par 13 s not tried yet

  worked example

  The part of a loan's principal due after the next 12 months. How is it classified on the balance sheet? (Current means within one year.)

  1. Current asset
  2. Long-term asset
  3. Current liability
  4. Long-term liability

  Answer: Long-term liability

  1. This is a long-term liability.
  2. Current items are expected to be turned into cash, used up, or paid within a year; long-term items last longer than that.

• Working capital par 13 s not tried yet

  worked example

  Current assets are $88,500 and current liabilities are $37,000. What is working capital? (Use a minus sign if negative.)

  Answer: $51,500.00

  1. Working capital = current assets − current liabilities = $88,500 − $37,000 = $51,500.
  2. It's a snapshot, not a promise that the cash is available tomorrow.

rest ladder

Win 3 of your last 4 rounds and the course rests. A win is 90% right, within 2× the round's par. Pass the review when it comes back and the next rest is longer.

1. 1 day
2. 3 days
3. 7 days
4. 14 days
5. 30 days
6. 60 days
7. mastered · every 90 days

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