Q12E_1 - Horngren'S Financial And Managerial Accounting

Question

Identifying accounts, increases in accounts, and normal balances 

a. Interest Revenue b. Accounts Payable 

c. Common Stock d. Office Supplies 

e. Advertising Expense f. Unearned Revenue 

g. Prepaid Rent h. Utilities Expense 

i. Dividends j. Service Revenue 

Requirements 1. Identify each account as asset (A), liability (L), or equity (E).

Step-by-Step Solution

Answer

Identification of various accounts is given in step 2. 

Step 1: Definition of Accounts Payable

The accounts payable refer to the amount owed to the supplier of goods in exchange for goods or services.

Step 2: Identification of each account

Accounts	Assets (A), Liability (L), Equity (E)
A Interest revenue	Equity (E)
B Accounts Payable	Liability (L)
C Common stock	Equity (E)
D Office Supplies	Assets (A)
E Advertising Expense	Equity (E)
F Unearned Revenue	Liability (L)
G Prepaid Rent	Assets (A)
H Utility Expense	Equity (E)
I Dividends	Equity (E)
J Service Revenue	Equity (E)