Concept Introduction:
Asset:
An asset is a resource embodying an economic benefit that is owned and controlled by a business entity. The benefits derived from an asset are generally spread over the useful life of the asset. Assets can be tangible or intangible. In accounting, an asset is a real account and always shows debit balance.
Liability:
Liability is the obligation arising out of carrying business transactions that needs to be settled within a specified period of time. It is the sacrifice of economic benefits in future as the result of an obligation. Liabilities are classified as long term and short term. Liabilities represent real account and always show credit balance.
Equity:
Equity represents the ownership value of the business. In other words, the difference between assets and liabilities of a business is called equity. It is the net asset of an entity.
Revenue:
Revenue is the income earned by a business from its normal course of business by selling its products or services. It is also called sales or turnover. In accounting revenue, it is a nominal account and represents the credit balance.
Expense:
Expense is the money spent in a business effort to generate revenue. It is the outflow of resources for an item, service or a cost. Expense is a nominal account and always shows the debit balance.
To determine: The assets, liabilities, equity, revenue and expense accounts from the list of items
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Chapter 2 Solutions
Fundamental Accounting Principles
- Find the total assetsarrow_forwardWhat are the revenues for divisions M?arrow_forwardHarper Manufacturing produces a special type of polymer used in medical devices. In 2022, the first year of operations, Harper produced 5,500 tons of polymer and sold 3,200 tons. In 2023, the company produced the same amount but sold 6,500 tons (i.e., selling all of its inventory). The selling price per ton was $1,800, variable manufacturing costs per ton were $350, and variable selling expenses were $500 per ton. Fixed manufacturing costs were $3,500,000, and fixed administrative expenses were $600,000. Compute net income under variable costing for 2022.arrow_forward
- Burson Enterprises' May 31 bank reconciliation shows deposits in transit of $850. The general ledger Cash in Bank account shows total cash receipts during June of $48,500. The June bank statement shows total cash deposits of $44,300 (including $1,500 from the collection of a note; the note collection has not yet been recorded by Burson). What amount of deposits in transit should appear in the June 30 bank reconciliation? Helparrow_forwardCompute total manufacturing costsarrow_forwardgiven answer of this General accounting questionarrow_forward
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