Concept explainers
Equity Accounts: Equity Account comprises of items relating to the owner’s of the business. They include the common stock,
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,
Revenue: Revenue means the income generated from sale of goods or services. There may be other revenues also like rent received, Interest, Royalties and fees. Revenues would imply an inflow of cash or assets into the business
Expense: Expenses mean the costs incurred in carrying out the operations of the business during a specified period. Expenses involve outflow of cash or assets out of the business.
To classify:
The given accounts in desired categories.
Want to see the full answer?
Check out a sample textbook solutionChapter D Solutions
Managerial Accounting
- Classify each of the accounts listed below as assets (A), liabilities (L), owners equity (OE), revenue (R), or expenses (E). Indicate the normal debit or credit balance of each account. Indicate whether each account will appear in the Income Statement columns (IS) or the Balance Sheet columns (BS) of the work sheet. Item 0 is given as an example.arrow_forwardClassify each of the accounts listed below as assets (A), liabilities (L), owners equity (OE), revenue (R), or expenses (E). Indicate the normal debit or credit balance of each account. Indicate whether each account will appear in the Income Statement columns (IS) or the Balance Sheet columns (BS) of the work sheet. Item 0 is given as an example.arrow_forwardA summarized statement of transactions relating to a particular person, item expense or income. a. invoice O b. voucher chart of accounts Cd. accountsarrow_forward
- When recording the chart of accounts, the field you use to classify financial statement accounts is called : Select one A. Account description B. Account type C. Active designation D. Account IDarrow_forwardWhich type of credit account is balanced in the last two columns of a worksheet? O A. Expense B. Revenue C. Accounts payable D. Accounts receivablearrow_forwardWhich of the following best describes the classification and normal balance of the accounts receivable account? Select one: a. Asset, Debit b. Liability, credit c. Revenue, credit d. Owner's equity, debitarrow_forward
- Identify the items from the following list that are likely to serve as source documents. Item a. Sales receipt b. Liability accounts c. Balance sheet d. Ledger e. Bank statement f. General journal g. Income statement h. Telephone bill i. Credit card receipt Is this a source document?arrow_forwardIdentify the normal balance (debit [Dr] or credit [Cr]) for each of the following accounts: __________ Accounts Receivable. __________Equipment.arrow_forwardWhich of the following checks the arithmetical accuracy of accounts? O a. Balance sheet O b. Journal O c. Trial balance O d. Ledgerarrow_forward
- The T-account is used to summarize which of thefollowing?a. Increases and decreases to a single account in theaccounting system.b. Debits and credits to a single account in the accountingsystem.c. Changes in specific account balances over a timeperiod.d. All of the above describe how T-accounts are used byaccountants.arrow_forwardA. Enter the transactions in the general ledger (t-accounts) and balance off these accounts B. Extract a Trial Balancearrow_forwardPosting in the ledger should include all of the following except a. the amounts b. a brief description c. the date of the transaction d. the accounts affectedarrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning