Q5SE
Question
For each account listed, identify the category in which it would appear on a classified balance sheet. a. Office Supplies b. Interest Payable c. Retained Earnings d. Copyrights e. Land f. Accumulated Depreciation—Furniture g. Land (held for long-term investment purposes) h. Unearned Revenue i. Notes Payable (due in six years)
Step-by-Step Solution
VerifiedAccounts | Category |
a | Current Assets |
b | Current Liabilities |
c | Stockholders’ Equity |
d | Intangible Assets |
e | Property, Plant, and Equipment |
f | Property, Plant, and Equipment |
g | Long-term Investments |
h | Current Liabilities |
i | Long-term liabilities |
Current assets are those assets which can be converted into cash within a year or within an operating cycle. It includes office supplies, accounts receivable, cash, inventory etc.
Current liabilities are the obligations that are required to be paid within a year or within an operating cycle. It includes unearned revenue, accounts payable, interest payable, etc.
Stockholders’ equity represents the claims of the stockholders on the assets of the business. It includes common stock, retained earnings, etc.
Intangible assets are the assets which do not have physical existence, but it is valuable due to its special rights. It includes patents, copyrights, goodwill etc.
Property, plant and equipment are the assets which are used in the operations of the business. It includes land, building, equipment, furniture, etc.
Long term investments are assets that are held for long term investment purposes. It includes the investments and stocks held for longer term.