Chapter 18, Problem 1DQP

List five asset accounts, three liability accounts, and five expense accounts included in the acquisition and payment cycle fora typical manufacturing company.

To determine

List the following accounts that are to be included in the acquisition and payment cycle for a typical manufacturing company:

• Five asset accounts.
• Three liability accounts.
• Five expense accounts.

Explanation of Solution

The following are list of accounts to be included in acquisition and payment cycle:

1. a. Five asset accounts:
   • Office supplies
   • Machinery and Equipment
   • Land
   • Prepaid Expenses
   • Cash in bank
2. b. Three liability accounts:
   • Accrued insurance
   • Accounts payable
   • Other accrued liabilities
3. c. Five expense accounts:
   • Income tax expenses
   • Administrative expenses
   • Fines and penalties
   • Utilities expenses
   • Advertising expense
   • Fines and Penalties