Chapter 1, Problem 1.2AP

Account classifications include assets, liabilities, stockholders’ equity, dividends, revenues, and expenses.

Account Classifications	Accounts	Related Transactions
1. _____	Common stock	Sale of common stock to investors.
2. _____	Equipment	Equipment used for operations.
3. _____	Salaries payable	Amounts owed to employees.
4. _____	Service revenue	Sales of services to customers.
5. _____	Utilities expense	Cost of utilities.
6. _____	Supplies	Purchase of office supplies.
7. _____	Research and development expense	Cost of research and development.
8. _____	Land	Property used for operations.
9. _____	Income tax payable	Amounts owed to the IRS for taxes.
10. _____	Interest payable	Amount of interest owed on borrowing.

Required:

For each transaction, indicate whether the related account would be classified in the balance sheet as (a) an asset, (b) a liability, or (c) stockholders’ equity, in the income statement as (d) a revenue or (e) an expense, or in the statement of stockholders’ equity as (f) a dividend.