Question

Indicate the financial statement on which each of the following items appears. Use Ifor income statement, Efor statement of retained earnings, and Bfor balance sheet.

a. Services Revenue e. Equipment i. Dividends

b. Interest Payable f. Prepaid Insurance j. Office Supplies

c. Accounts Receivable g. Buildings k. Interest Expense

d. Salaries Expense h. Rental Revenue l. Insurance Expense

Short answer

a - I e - B i - E

b - B f - B j - B

c - B g - B k - I

d - I h - I l - I

Step-by-step solution

Items to appear in the income statement

An income statement is the list of all expenses and incomes that a business earns during a particular period.

From the given list following items would appear in the income statement –

a. Service revenues

d. Salaries expenses

h. Rental revenue

k. Interest expense

l. Insurance expense

Items to appear in retained earnings

Retained earnings are the statement that adjusts the distributable income from the net income and shows the undistributed income for the period as retained earnings.

From the given list only dividends would appear in the retained earnings statement.

Items to be stated in the balance sheet

A balance sheet lists all the resources owned by the business and the obligations to be paid.

From the given list following items would appear in the balance sheet –

b. Interest payable

c. Accounts receivables

e. Equipment

f. Prepaid insurance

g. Buildings

j. Office supplies