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
Loose Leaf for Financial Accounting: Information for Decisions
- Consider 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_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_forwardList the classification of each of the following accounts as A (asset), L (liability), OE (owners equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side.arrow_forward
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- 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 normal balance (Dr for Debit; Cr for Credit) and type of account (A for asset, L for liability, E for equity, E-rev for revenue, E-exp for expense, and E-eq for equity) for each of the following items. Table 3.19arrow_forwardThe balance sheet lists which of the following? A. assets, liabilities, and owners equity B. revenues, expenses, gains, and losses C. assets, liabilities, and investments by owners D. revenues, expenses, gains, and distributions to ownersarrow_forward
- Which of these accounts is an asset? A. Common Stock B. Supplies C. Accounts Payable D. Fees Earnedarrow_forwardAn account that has unearned in its name is classified as what type of account? a. Asset b. Liability c. Revenue d. Owners equity e. Expensearrow_forwardIdentify the normal balance (Dr for Debit; Cr for Credit) and type of account (A for asset, L for liability, E for equity, E-rev for revenue, E-exp for expense, and E-eq for equity) for each of the following accounts. Table 3.24arrow_forward
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