Concept explainers
Expenses are listed on the income statement as they appear in the chart of accounts or in descending order (by dollar amount).
Identify whether the given statement is true or false.
Answer to Problem 1TF
Expenses are listed on the income statement as they appear in the chart of accounts or in descending order (by dollar amount) are True.
Explanation of Solution
Expenses: Expenses are costs incurred for the operations of a business. The costs incurred for generating revenues are rent expense, depreciation expense, general and administrative expenses, selling expenses, and utilities expense.
Describe two approaches to listing the expenses in the income statement:
- The expenses can be listed in the same order as it shown in the chart of accounts.
- It can be shown in descending order by dollar amount.
The second approach helps the user in identifying the major expenses. From the above explanation, it is clear that expenses are listed on the income statement as they appear in the chart of accounts or in descending order (by dollar amount). Hence, the given statement is true.
Want to see more full solutions like this?
Chapter 6 Solutions
College Accounting Chapters 1-27 (New in Accounting from Heintz and Parry)
- 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_forwardIdentify the financial statement on which each of the following accounts would appear: the income statement (IS), the retained earnings statement (RE), or the Balance Sheet (BS). A. Insurance Expense B. Accounts Receivable C. Office Supplies D. Sales Revenue E. Common Stock F. Notes Payablearrow_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_forward
- The chart of accounts lists capital accounts first, followed by liabilities, assets, expenses, and revenue.arrow_forwardIdentify the financial statement on which each of the following account categories would appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE). Table 3.21arrow_forward1. List the following classifications of accounts in all of the columns in which they appear on the work sheet, with the exception of the Adjustments columns. (Example: Assets) 2. List Net Income in the appropriate columns.arrow_forward
- On the work sheet, assets are recorded in which of the following columns? a. Trial Balance, Credit b. Income Statement, Debit c. Balance Sheet, Debit d. Adjusted Trial Balance, Creditarrow_forwardIdentify the financial statement on which each of the following account categories would appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE). Indicate the normal balance (Dr for debit; Cr for credit) for each account category. Table 3.16arrow_forwardFINANCIAL STATEMENT ACCOUNTS Label each of the following accounts as an asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). Indicate the financial statement on which the account belongsincome statement (IS), statement of owners equity (SOE), or balance sheet (BS)in a format similar to the following.arrow_forward
- From the following Company Z adjusted trial balance, prepare simple financial statements, as follows: A. Income Statement B. Retained Earnings Statement C. Balance Sheetarrow_forwardThe Accounting Equation For each of the following independent cases, fill in the blank with the appropriate dollar amount.arrow_forwardThe Accounting Equation For each of the following cases, fill in the blank with the appropriate dollar amount.arrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning