Chapter D, Problem 2E

To determine

Balance Sheet: Balance Sheet or the statement of financial positions shows the assets, liabilities and equity of any business. The sum of all assets is equal to the sum of all liabilities and equity.

Equity Accounts: Equity Account comprises of items relating to the owner’s of the business. They include the common stock, retained earnings less dividends distributed.

Liability: Liabilities represent the amount which the business owes to outsiders. Examples of liabilities include bank loans, notes payable, accounts payable, outstanding expenses payable.

Assets: Assets are the resources available to the business from which it will derive future economic benefits. Examples of asset are Land, Building, Plant and Machinery, Cash, Accounts Receivable, Prepaid expenses, Inventory.

Accounts:

Accounts are the specific heads under which debits and credits are posted. There may be asset account, liability, expenses, income account or equity account.

To choose:

The option which fits in the given sentences.