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. 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.

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Chapter D, Problem 3QS

To determine

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.

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.

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