Classify each of the following items as assets (A), liabilities (L), or equity (EQ). 1. Land2. Owner, Capital3. Equipment4. Accounts payable5. Accounts receivable6. Supplies

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Description: Classify each of the following items as assets (A), liabilities (L), or equity (EQ). 1. Land2. Owner, Capital3. Equipment4. Accounts payable5. Accounts receivable6. Supplies

Answered: 1. Land 2. Owner, Capital 3. Equipment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Classify each of the following items as assets (A), liabilities (L), or equity (EQ).

1. Land
2. Owner, Capital
3. Equipment
4. Accounts payable
5. Accounts receivable
6. Supplies

Expert Solution

Step 1 Overview

Assets carry future economic benefits. They generate future cash flows. These are business owned resources.

Liabilities are business obligations that need to be paid or delivered.

Equity is the capital of the business owner. This is the investment made by the owner into a business.

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