Concept explainers
Provide the names of two (a) asset accounts, (b) liability accounts, and (c) equity accounts.
Concept Introduction:
Assets are physical as well as intangible resources of the business which are kept forproviding future economic benefits.Liabilities are dues or amount payable by the business. Equity represents the sum of capital and profits/ loss earned by the business owners. Net asset is the amount of assets available after payment of liabilities.
To indicate: The names of two assets, two liabilities, and two equity accounts.
Explanation of Solution
Assets: Assets are physical as well as intangible resources of the business which are kept providing future economic benefits. The names of two assets accounts are as follows:
- Equipment: Equipment is an asset purchased for production.
- Land: Land is a long term asset.
Concept Introduction:
Assets are physical as well as intangible resources of the business which are kept for providing future economic benefits. Liabilities are dues or amount payable by the business. Equity represents the sum of capital and profits/ loss earned by the business owners. Net asset is the amount of assets available after payment of liabilities.
To indicate: The names of two assets, two liabilities, and two equity accounts.
Explanation of Solution
Liabilities: Liabilities are dues or amount payable by the business. The names of two liabilities accounts are as follows:
- Accounts payable: Accounts payable is a short term liabilities for payment of purchases.
- Long term loan: Long term loan is a long term liability for payment of loan.
Concept Introduction:
Assets are physical as well as intangible resources of the business which are kept for providing future economic benefits. Liabilities are dues or amount payable by the business. Equity represents the sum of capital and profits/ loss earned by the business owners. Net asset is the amount of assets available after payment of liabilities.
To indicate: The names of two assets, two liabilities, and two equity accounts.
Explanation of Solution
Equity: Equity represents the sum of capital and profits/ loss earned by the business owners.
Net assets: A net asset is the amount of assets available after the payment of liabilities. The names of two equity accounts are as follows:
- Common stock: Common stock represents the amount of investment made by the business owners.
- Retained earnings: Retained earnings represent the accumulated net income of the business.
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Chapter 2 Solutions
Connect Access Card for Financial Accounting: Information and Decisions
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- Accounts receivable is classified as an _______________ a. An Asset b. A Expense. c. A Capital d. A Liability.arrow_forwardClassify each of the following accounts as an asset (A), liability (L), or equity (EQ) account. Casharrow_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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