When Classifying Assets and Liabilities

question 217

Multiple Choice

When classifying assets and liabilities:

• A)assets are classified as liquid and non-liquid.
• B)for most businesses the operating cycle is two years.
• C)furniture and fixtures are long-term assets.
• D)current liabilities include accounts receivable.

Calculate expenses and revenues accurately based on provided data.

Prepare adjusting journal entries for various accounting scenarios.

Recognize the importance of adhering to the accrual basis of accounting.

Understand the concepts of prepaid expenses, unearned revenues, and accrued expenses.

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