Concept explainers
Balance Sheet Accounts and Their Use
Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account. An account title may be used more than once or not at all.
Cash
Prepaid Asset
Investments
Taxes Payable
Accounts Receivable
Land
Accounts Payable
Retained Earnings
Notes Receivable
Buildings
Notes Payable
Common Stock
____________________ 1. A written obligation to repay a fixed amount, with interest, at some time in the future
____________________ 2. Twenty acres of land held for speculation
____________________ 3. An amount owed by a customer
____________________ 4. Corporate income taxes owed to the federal government
____________________ 5. Ownership in a company that allows the owner to receive dividends before common shareholders receive any distributions
____________________ 6. Five acres of land used as the site for a factory
____________________ 7. Amounts owed on an open account to a vendor, due in 90 days
____________________ 8. A checking account at a bank
____________________ 9. A warehouse used to store equipment
____________________ 10. Claims by the owners on the undistributed net income of a business
____________________ 11. Rent paid on an office building in advance of use of the facility
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Financial Accounting: The Impact on Decision Makers
- Give what is required, For the Classification: (Classify the account if it is current/noncurrent asset; current/non-current liabilities; equity; revenue or expense); For the normal balance (answer whether the normal balance is a debit or credit) For the presentation (Classify whether a balance sheet or an income statement account). ACCOUNT CLASSIFICATION NORMAL BALANCE PRESENTATION OWNER’S DRAWING PETTY CASH FUND ACCOUNTS RECEIVABLE NOTES RECEIVABLE (6 MOS.) NOTES PAYABLE (2 YEARS) INTEREST EXPENSE BONDS PAYABLE UNEARNED INCOME ACCRUED EXPENSE PREPAID EXPENSE SUPPLIES COST OF GOOD SOLDS MERCHANDISE INVENTORY, END MERCHANDISE INVENTORY, BEG PATENT GOODWILL ADVANCES FROM CUSTOMERS ADVANCES TO SUPPLIERS…arrow_forwardIdentifying Financial Statement Line Items and Accounts Several line items and account titles are listed below. For each, indicate in which of the following financial statement(s) we would likely find the item or account: income statement (IS), balance sheet (BS), statement of stockholders' equity (SE), or statement of cash flows (SCF). (Select all that apply.) Account (a) Cash asset (b) Expenses (c) Noncash assets (d) Contributed capital (e) Cash outflow for capital expenditures (f) Retained earnings (g) Cash inflow for stock issued (h) Cash outflow for dividends (i) Revenue Financial Statement(s) ◆ + + ♦ ♦ + ◆arrow_forwardThe income statement is drawn up from the figures in the _________________ Select one: a. Accounts Receivable ledger b. Accounts payable ledger c. Trial Balance d. Cash Flow Statementarrow_forward
- Which of the following accounts belongs in the liability section of a balance sheet? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a interest expense b accumulated depreciation U accounts payable d preferred stockarrow_forwardClassify each of the following accounts as either an asset (A), liability (L), or equity (EQ) account: _________ Note Receivable. __________ Accounts Payable.arrow_forwardWhen 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_forward
- Could anyone explain this question? indicate the financial statement on which the account’s balance should be found. Also, if the account is shown on a company’s balance sheet, indicate if it should appear in the asset section, liability section, retained earnings section, income section, or stockholders’ equity section. Accounts Receivable Note Receivable Discount on Note Receivable Bank Service Charge Expense Bad Debts Expense Sales Return Liability Interest Revenue Allowance for Doubtful Accounts Cash Over/ Short Interest Receivable Sales Returns and Allowancesarrow_forwardWhich of the following accounts is not a permanent account? Select one: a. Utilities Expense b. Cash in Bank c. Accounts Payable d. Retained Earningsarrow_forwardState which account title the following terminologies belong: A. Asset account title, B. Liability Account Title C. Income Account title D. Expense Account title E. Capital Account title 1. Sales 2. Drawing 3. Cash 4. Accounts Receivable 5. Notes Payable 6. Inventory 7. Salaries and Wages 8. Salaries Payable 9. Taxes and Licenses 10. Notes Receivablearrow_forward
- Explain what is meant by the term real accounts (also known as permanent accounts).arrow_forwardWhat are real accounts? What are nominal accounts? Give examples of each.arrow_forwardUsing the information contained in the accounts receivable ledger, the accountant can prepare _________. a. The general ledger balance b. The balance sheet c. The income statement d. A schedule of accounts receivable e. None of the abovearrow_forward
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