The Accounts

Question 1

Current Assets

Answer 1

• cash
• investment in short-term securities
• accounts receivable
• inventory
• supplies
• prepaid
• prepaid insurance
• interest receivable(watch due date)

Question 2

Long Term Assets

Answer 2

• notes receivable-watch date
• building and equipment
• land
• investment in long-term securities
• intangible assets(patents, trademarks, copyrights, and goodwill)

Question 3

Current Liabilities

Answer 3

• Accounts payable
• Unearned revenue
• Interest payable
• Rent payable
• Dividends payable
• Salaries payable
• wages payable
• Income taxes payable

Question 4

Long-term liabilities

Answer 4

• notes payable
• mortgages payable
• bonds payable

Question 5

Cash

Answer 5

-current asset

includes forms of money, coins, paper bills, checks, electronic transfer funds, money orders etc…

-it can be in checking accounts, savings, company vault, cash registers etc.

Question 6

Accounts Receivable

Answer 6

Current asset

-amount due to creditors or suppliers for merchandise purchased or services received

Question 7

Notes payable

Answer 7

• current or long term liability dependent on due date
• amount due to bank or other financial institution for loan businesses obtained.
• business is the borrower
• formal borrowing of money

there is interest expense and interest expense leads to interest payable

Question 8

Notes Receivable

Answer 8

current or long term asset

• if a business has a note payable then the bank has a note receivable
• this the formal lending of money
• will have interest rate

Question 9

Land,building,equipment

Answer 9

• long term assets
• these assets are owned by the business
• when they are used the business has depreciation expense
• if not owned the business have a rent expense

Question 10

Dividends

Answer 10

an amount a corporation pays to stockholders resulting from profits

• it reduces retained earnings and shows up as a deduction
• dividends payable occur when the corporation had promised dividends but not yet sent the money

dividend revenue is a revenue account. it is on the income statement of the shareholder. The shareholder will then pay taxes on it.

Question 11

Common Stock

Answer 11

• it is a representation of stockholder’s investments in a business
• one of the sources for funding assets

Question 12

Supplies

Answer 12

• current asset

- such as office supplies

Question 13

Supplies Expense

Answer 13

• expense account

- office supplies that have been used and consumed

Question 14

Inventory

Answer 14

-current asset

• merchandise for resale
• sometimes called merchandise inventory

Question 15

Costs of goods sold

Answer 15

-expense account

• cost of selling inventory
• use of an asset creates an expense

Question 16

Prepaid Insurance

Answer 16

• asset either current or long term
• an insurance premium paid by a business covering future periods
• as times passes insurance coverage is used up which creates the insurance expense

Question 17

Unearned Revebues

Answer 17

liability either current or long term

• business receives money in advance of performing a service so it is now in debt to provide the service or return the money
• as the business performs the service it will then have revenue

Question 18

Revenues

Answer 18

the performance or rendering of a service results in revenue

Question 19

gain or loss on the sale of an asset

Answer 19

• revenue account

- refers to profits on selling assets other than inventory