Chapter 2, Problem 1DQ

To determine

Concept introduction:

There are 5 types of accounts:

1. Assets Account − It means what is owned by the business. The assets may be fixed assets or current assets. The current assets are those which can be easily converted into cash. All assets other than current assets are fixed assets. The fixed assets increase the earning capacity of the business.
2. Liability Accounts − It means what the business owes to the outside world. These are the claims against the assets of the company. The liabilities are of two types − long term liabilities and current liabilities. The current liabilities are those which are to be repaid within one year. The long term liabilities are those which are more than a year.
3. Equity Accounts − It means owner equity, which may be in form of share capital, retained earnings and surplus.
4. Revenue − It means the income earned by the business in regular course, it does not include any abnormal profit or income. It is the income earned from the sale of goods and/or services in which the business deals.
5. Expenses − These are the expenditures incurred in production, sale and distribution of the goods and/or services in which the business deals.

To provide:

Name of two Asset, liabilities and Equity Accounts