Concept explainers
Equity Accounts: Equity Account comprises of items relating to the owner’s of the business. They include the common stock,
Liability: Liabilities represent the amount which the business owes to outsiders. Examples of liabilities include bank loans, notes payable, accounts payable, outstanding expenses payable.
Assets: Assets are the resources available to the business from which it will derive future economic benefits. Examples of asset are Land, Building, Plant and Machinery, Cash,
Accounts:
Accounts are the specific heads under which debits and credits are posted. There may be asset account, liability, expenses, income account or equity account.
To choose:
The option which fits in the given sentences.
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Check out a sample textbook solutionChapter D Solutions
Managerial Accounting
- Explain how the accounting equation organizes financial information using T-accounts and debits and credits.arrow_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_forwardWhich set of accounts has the same type of normal balance? A. Cash, accounts payable B. Prepaid rent, unearned service revenue C. Dividends, common stock D. Accounts payable, retained earningsarrow_forward
- Which of the following accounts will normally have a debit balance? A. Common Stock B. Fees Earned C. Supplies D. Accounts Payablearrow_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_forwardWhich of these accounts commonly requires both debit and credit entries? A. Sales Revenue B. Utilities Expense C. Accounts Receivable D. Common Stockarrow_forward
- 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_forwardConsider 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_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
- Which of the following accounts is increased by a debit? A. Common Stock B. Accounts Payable C. Supplies D. Service Revenuearrow_forwardWhat are real accounts? What are nominal accounts? Give examples of each.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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