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Q. 8SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 34

Short Answer

Identifying accounts Consider the following accounts: a. Accounts Payable b. Cash c. Common Stock d. Accounts Receivable e. Rent Expense f. Service Revenue g. Office Supplies h. Dividends i. Land j. Salaries Expense Identify each account as Asset, Liability, or Equity

Accounts are identified as follows:

a

Liability

f

Equity

b

Asset

g

Asset

c

Equity

h

Equity

d

Asset

i

Asset

e

Equity

j

Equity

See the step by step solution

Step by Step Solution

Step1: Explanation on Asset

Assets indicate the business's resources that are owned and controlled by the business itself. It includes cash, accounts receivable, supplies, land, building, etc.

Step2: Explanation on liability

Liability indicates the obligations that a business owes to the creditors. It includes accounts payable, creditors, notes payable, etc.

Step 3: Explanation on equity

Equity indicates the claim of the owners on the assets of the business. It includes common stock, retained earnings, revenues, expenses, etc.

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