Concept explainers
(a)
Concept introduction:
Assets are the items that the company owns and helps in generating revenue during its lifespan.
To state:
Two Assets.
Answer to Problem 1DQ
Accounts Receivable and Bank Account.
Explanation of Solution
Assets are the items that your company owns which can provide future economic benefits. Assets are defined as resources that help generate profit in your business.
These are shown in the
As per
Some of the examples for assets are:
- Cash
- Land and Buildings
- Equipment
- Patent
Goodwill etc.
(b)
Concept introduction:
Liability is defined as obligations that your business needs to fulfill. In simple words, Liability means credit.
To state:
Two Liabilities
Answer to Problem 1DQ
Accounts Payable Account & Bank Loan Account
Explanation of Solution
Liabilities are the items the company oweto others. Liabilities are defined as a way to raise finances for the company.
These are shown in the balance sheet of the companies on left side. Liabilities are classified as current and non-current liabilities wherein current liabilities have a maturity period of less than or equal to a year, whereas, non-current liabilities have maturity period of more than a year.
As per
Some of the examples for liabilities are:
- Accounts Payable
- Interest Payable
- Unearned Revenue
- Long term debt
- Bank Loan etc.
(c)
Concept introduction:
Equity is defined as the items that show the investments of the owner or the investors in the company.
To state:
Two Equity.
Answer to Problem 1DQ
Equity Share Capital Account & Retained earnings Account.
Explanation of Solution
Equity accounts represent the items that displays the amount invested by various people in the company.
Owner’s equity is the difference between what you have and what you owe. It is regarded as the owner's investment or net worth. It denotes the portion of the total assets that the owners or stockholders of the company own
As per Accounting Equation, Equity = Assets - Liabilities:
Some of the examples for equity accounts are:
- Retained Earnings
- Additional paid-in Capital
- Drawings
- Common
Stock Equity - Preference Stock
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Chapter D Solutions
Managerial Accounting
- Classify each of the following accounts as an asset (A), liability (L), or equity (EQ) account.arrow_forwardClassify the accounts as either an asset (A), liability (L), or equity (EQ) account. Accounts Payablearrow_forwardClassify each of the following items as assets (A), liabilities (L), or equity (EQ). Accounts payablearrow_forward
- Which 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_forwardAccounts receivable can be classified as _____ a. A Expense. b. A Liability. c. A Capital d. An Assetarrow_forwardUnder which of the following categories would Accounts Receivable appear? A. long−term assets B. current assets C. long−term liabilities D. current liabilitiesarrow_forward
- Classify each of the following accounts as either an asset (A), liability (L), or equity (EQ) account: _________ Accounts Receivable. __________ Equipment.arrow_forwardClassify each of the following items as assets (A), liabilities (L), or equity (EQ).arrow_forwardConsider the following accounts, and determine if the account is an asset (A), a liability (L), or equity (E). A. Accounts Payable B. Cash C. Dividends D. Notes Payablearrow_forward
- Consider the following accounts and determine if the account is an asset (A), a liability (L), or equity (E). A. Accounts Receivable B. Sales Revenue C. Land D. Unearned Revenuearrow_forwardAccounts receivable is classified as an _______________ a. An Asset b. A Expense. c. A Capital d. A Liability.arrow_forwardRequired: For the following list of accounts select the type of account (Asset,Contra Asset, Liability, Equity, Revenue, or Expense), normal balance (debit or credit), and the financial statement the account would appear on (Income Statement, Retained Earnings Statement or Balance Sheet). Classify Accountsarrow_forward
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