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Financial & Managerial Accounting
Found in: Page 80
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Question: Classify each of the following accounts as an asset (A), liability (L), or equity (EQ) account.

a. Cash d. Prepaid Insurance g. Accounts Payable

b. Prepaid Rent e. Office Equipment h. Unearned Rent Revenue

c. Office Supplies f. Common Stock i. Dividends

Answer

There are 5 assets accounts, two liabilities accounts, and two equity accounts in the given list

See the step by step solution

Step by Step Solution

Step 1: Assets accounts

Assets are the resources to generate income. These resources may vary from short run to long run.

From the given list, the following are the assets account –

a. Cash

b. Prepaid rent

c. Office supplies

d. Prepaid Insurance

e. Office Equipment

Step 2: Liability accounts

Liabilities are the obligations of the business. Like assets, they are also for the short run and long run based on the re-payment terms. From the given list, the following are the liability accounts –

g. Accounts Payable

h. Unearned rent revenue

Most popular questions for Business-studies Textbooks

Question: Aracel Engineering completed the following transactions in the month of June.

a. Jenna Aracel, the owner, invested $100,000 cash, office equipment with a value of $5,000, and $60,000 of drafting equipment to launch the company in exchange for common stock.

b. The company purchased land worth $49,000 for an office by paying $6,300 cash and signing a longterm note payable for $42,700.

c. The company purchased a portable building with $55,000 cash and moved it onto the land acquired in b.

d. The company paid $3,000 cash for the premium on an 18-month insurance policy.

e. The company completed and delivered a set of plans for a client and collected $6,200 cash.

f. The company purchased $20,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $10,500.

g. The company completed $14,000 of engineering services for a client. This amount is to be received in 30 days.

h. The company purchased $1,150 of additional office equipment on credit.

i. The company completed engineering services for $22,000 on credit.

j. The company received a bill for rent of equipment that was used on a recently completed job. The $1,333 rent cost must be paid within 30 days.

k. The company collected $7,000 cash in partial payment from the client described in transaction g.

l. The company paid $1,200 cash for wages to a drafting assistant.

m. The company paid $1,150 cash to settle the account payable created in transaction h.

n. The company paid $925 cash for minor maintenance of its drafting equipment.

o. The company paid $9,480 cash in dividends.

p. The company paid $1,200 cash for wages to a drafting assistant.

q. The company paid $2,500 cash for advertisements on the web during June.

Required

3. Prepare a trial balance as of the end of June.

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