Financial Accounting Course

U.S. GAAP Codification Accounting Topics

Asset Accounts 01
Examples and Practice Questions

U.S. GAAP Codification Accounting by Topic Accounting Terms
Financial Accounting Intermediate Accounting Advanced Accounting


1. Assets represent future economic benefits 
2. Assets have normal balances on the debit side

3. Increases in asset accounts are recorded on the debit side
4. Decreases in asset accounts are recorded on the credit side
Classification of assets 
1. Assets are classified as current and noncurrent assets
2. Current assets are expected to be converted to cash or consumed
--> within a year or normal operating cycle whichever is longer
--> Codification link to current assets  
3. Current assets include the following
(1) Cash and cash equivalents
(2) Receivables, current
(3) Investments, current
(4) Inventories
(5) Prepaid expenses
4. Noncurrent assets are expected to be converted to cash or consumed
--> after a year or normal operating cycle whichever is longer
5. Noncurrent assets include the following
(1) Receivables, noncurrent
(2) Investments, noncurrent
(3) Property, plant and equipment
(4) Intangible assets
(5) Other noncurrent assets
Net working capital 
1. Net working capital = Current assets - Current liabilities
2. Net working capital measures the margin of current assets over current liabilities
3. More net working capital implies that the entity has more liquidity
Current ratio 
1. Current ratio = Current assets / Current liabilities
2. Current ratio measures whether the entity has enough current assets to pay off current liabilities.
        Current Assets
  Current Ratio = ----------------------
       Current Liabilities
Practice Questions 
1. Current assets = $300,000, Current liabilities = $200,000

2. What is the amount net working capital?
    Net working capital = current assets - current liabilities
    = $300,000 - $200,000 = $100,000   

3. What is the current ratio?
    Current ratio = Current assets / Current liabilities
    = $300,000 / $200,000 = 1.50

Examples of current assets


Cash and cash equivalents


Accounts receivable


Notes receivable


Interest receivable


Rent receivable








Raw materials




Finished goods






Prepaid expenses


Prepaid rent expense


Prepaid insurance expense


Prepaid interest expense




Trading securities


Available-for-sale securities, current


Held-to-maturity securities, current


Other current investments

Examples of noncurrent assets


Notes receivable, noncurrent


Long-term loans


Available-for-sale securities, noncurrent


Held-to-maturity securities, noncurrent


Other noncurrent investments  




Property, plant and equipment










Capitalized leases


Leasehold improvements




Intangible assets








Codification Topics at the 100 Level 
Topic 105: Generally Accepted Accounting Principles

Codification Topics at the 200 Level 
Topic 205: Presentation of Financial Statements
Topic 210: Balance Sheet
Topic 215: Statement of Shareholder Equity
Topic 220: Comprehensive Income
Topic 225: Income Statement
Topic 230: Statement of Cash Flows
Topic 235: Notes to Financial Statements
Topic 250: Accounting Changes and Error Corrections
Topic 255: Changing Prices
Topic 260: Earnings per Share
Topic 270: Interim Reporting
Topic 272: Limited Liability Entities
Topic 274: Personal Financial Statements
Topic 275: Risks and Uncertainties
Topic 280: Segment Reporting

Codification Topics at the 300 Level 
Topic 305: Cash and Cash Equivalents
Topic 310: Receivables
Topic 320: Investments-Debt and Equity Securities
Topic 320-10-35: Transfers of Securities: Between Categories
Topic 323: Investments-Equity Method and Joint Ventures
Topic 325: Investments-Other
Topic 330: Inventory
Topic 340: Other Assets and Deferred Costs
Topic 350: Intangibles-Goodwill and Other
Topic 360: Property, Plant, and Equipment

Codification Topics at the 400 Level 
Topic 405: Liabilities
Topic 410: Asset Retirement and Environmental Obligations
Topic 420: Exit or Disposal Cost Obligations
Topic 430: Deferred Revenue
Topic 440: Commitments
Topic 450: Contingencies
Topic 460: Guarantees
Topic 470: Debt
Topic 480: Distinguishing Liabilities from Equity

U.S. GAAP Codification of Accounting Standards
Accounting Standards Codification, ASC, Overview
ASC Codification 100: General Principles
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry

U.S. GAAP by Codification Topic 
 105  GAAP Hierarchy 
 105  GAAP History 

 205  Presentation of Financial Statements 
 205-20 Discontinued Operations 
 210  Balance Sheet 
 210-20 Offsetting 
 220  Comprehensive Income 
 225  Income Statement 
 225-20 Extraordinary and Unusual Items 
 230  Statement of Cash Flows 
 250  Accounting Changes and Error Corrections 
 260  Earnings per Share 
 270  Interim Reporting
 310  Impairment of a Loan
 320  Investment Securities 
 320  Other-Than-Temporary Impairments, FSP FAS 115-2 
 320-10-05 Overview of Investments in Other Entities 
 320-10-35 Reclassification of Investments in Securities
 323-10 Equity Method Investments
 323-30 Investments in Partnerships and Joint Ventures 
 325-20 Cost Method Investments 
 330  Inventory

 340-20 Capitalized Advertising Costs 
 350-20 Goodwill 
 350-30 Intangibles Other than Goodwill 
 350-40 Internal-Use Software 
 350-50 Website Development Costs 
 360  Property, Plant and Equipment
 360-20 Real Estate Sales 
 410  Asset Retirement and Environmental Obligations 
 420  Exit or Disposal Cost Obligations 
 450  Contingencies 
 450-20 Loss Contingencies 
 450-30 Gain Contingencies
 480  Redeemable Financial Instruments 

 505-20 Stock Dividends, Stock Splits 
 505-30 Treasury Stock 

 605  SEC Staff Accounting Bulletin, Topic 13 
 605-25 Revenue Recognition - Multiple Element Arrangements 
 715-30 Defined Benefit Plans - Pension
 718  Share-Based Payment 
 730  Research and Development 
 730-20 Research and Development Arrangements 

 805  Business Combinations  
 810  Consolidation 
 810  Noncontrolling Interests 
 810  Consolidation of Variable Interest Entities, SFAS 167 
 815  Derivatives and Hedging Overview 

 820  Fair Value Measurements  
 820  Fair value when the markets are not active, FSP FAS 157-4
 825  Fair Value Option 

 830  Foreign Currency Matters 
 830-20 Foreign Currency Transactions 
 830-30 Translation of Financial Statements 
 835  Interest 
 835-20 Capitalization of Interest 
 835-30 Imputation of Interest 

 840  Leases 
 840-20 Operating Leases 
 840-30 Capital Leases 
 840-40 Sale-Leaseback Transactions
 845  Nonmonetary Transactions 

 855  Subsequent Events 
 860-20 Sale of Financial Assets, SFAS 166 
 860-50 Servicing Assets and Liabilities, SFAS 156 

 985-20 Costs of software to be sold  

U.S. GAAP by Topic
Accounting Topics

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