Concept explainers
Classification of accounts
Asset: Assets refer to the resources owned by the business, which are utilized in the course of the business to generate revenue. The following belong to the assets account:
- Accounts Receivable
- Prepaid
- Cash
- Land
- Supplies
Liability: Liabilities include the claims of the creditors on the assets of the business. The liability is the obligation of the business. The following belong to the liabilities account:
- Accounts Payable
- Salaries payable
- Notes payable
- Income tax payable
- Unearned rent
Revenue: Revenue is known as “Top line” because it appears very top on the income statement of the company. It is used to imply profits or net income (bottom line) of the company by subtracting the total expenses from total revenues. The following belong to the revenue account
- Rent revenue
- Fees earned
- Service revenue
Expense: Expense is the cost borne by a company to produce and sell the goods and services to the customers. The following belong to the expense account
- Salaries expense
- Insurance expense
- Supplies expense
- Utilities expense
- Depreciation expense
To Identify: Each account would appear as (a) assets, (b) liabilities, (c) revenue or (d) expense.
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Chapter 4 Solutions
Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
- For each account, indicate whether it appears in the general ledger or the subsidiary ledger Prepaid Rentarrow_forwardPlease check my work For journal entries 1 through 12, indicate the explanation that most closely describes it. You can use explanations more than once. To record receipt of unearned revenue. To record this period's earning of prior unearned revenue. To record payment of an accrued expense. To record receipt of an accrued revenue. To record an accrued expense. To record an accrued revenue. To record this period's use of a prepaid expense. To record payment of a prepaid expense. To record this period's depreciation expense.arrow_forwardTOPIC: Rules of Debit and Credit Instruction: Identify the classification of account. And Choose the letter of the correct answer. Questions: 1. Other Revenue a. Assetsb. Liabilitiesc. Equityd. Income e. Expense 2. Prepaid Renta. Assetsb. Liabilitiesc. Equityd. Income e. Expense 3. Allowance for Doubtful Accountsa. Assetsb. Liabilitiesc. Equityd. Income e. Expense 4. Depreciationa. Assetsb. Liabilitiesc. Equityd. Income e. Expense 5. Delivery Equipmenta. Assetsb. Liabilitiesc. Equityd. Income e. Expense 6. Used Shop Suppliesa. Assetsb. Liabilitiesc. Equityd. Income e. Expense 7. Utilities Expensea. Assetsb. Liabilitiesc. Equityd. Income e. Expense 8. Salaries and Wagesa. Assetsb. Liabilitiesc. Equityd. Income e. Expense 9. Beverage Inventorya. Assetsb. Liabilitiesc. Equityd. Income e. Expense 10. Uncollectible Accounta. Assetsb. Liabilitiesc. Equityd. Income e. Expense 11. Landa. Assetsb. Liabilitiesc. Equityd. Income e. Expense 12. Accounts Receivablea. Assetsb. Liabilitiesc. Equityd.…arrow_forward
- Define each of the following terms:j. Account receivable; days sales outstanding; aging schedulearrow_forwardIdentify the normal balance (debit [Dr] or credit [Cr]) for each of the following accounts: __________ Interest Payable. _________ Unearned Revenue.arrow_forwardFor each account, identify whether it is included in a post-closing trial balance. a. Store Equipment b. Interest Payable c. Notes Receivable d. Rental Revenue e. Commission Revenue f. Accounts Receivable Included in post-closing trial balance?arrow_forward
- How is the account Accounts Payable classified and what kind of balance should it have? Group of answer choices current liability, debit current liability, credit revenue, debit revenue, creditarrow_forwardWhich account is least likely to appear in an adjustingjournal entry?a. Cashb. Interest Receivablec. Income Tax Expensed. Salaries and Wages Expensearrow_forwardIdentify which of the following accounts would be listed on the company’s Post-Closing TrialBalance.A. Accounts ReceivableB. Accumulated DepreciationC. CashD. Office ExpenseE. Note PayableF. Rent RevenueG. Retained EarningsH. Unearned Rent Revenuearrow_forward
- Identify which type of adjustment is associated with this account, and what is the other account in the adjustment? Choose accrued revenue, accrued expense, deferred revenue, or deferred expense. A. accounts receivable B. interest payable C. prepaid insurance D. unearned rentarrow_forwardIdentify whether each of the following accounts are nominal/temporary or real/permanent. A. Rent Expense B. Unearned Service Fee Revenue C. Interest Revenue D. Accounts Payablearrow_forwardIndicate the work sheet columns (Income Statement Debit, Income Statement Credit, Balance Sheet Debit, Balance Sheet Credit) in which the balances of the following accounts should appear: a. S. Moon, Drawing b. Utilities Expense c. Merchandise Inventory (ending) d. Purchases Discounts e. Unearned Rent f. Sales Returns and Allowances g. Accumulated Depreciation, Equipment h. Income Summary i. Service Income j. Prepaid Insurancearrow_forward
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