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Chapter 3: Q 24QS (page 144)

The following are common categories on a classified balance sheet.
A. Current assets D. Intangible assets
B. Long-term investments E. Current liabilities
C. Plant assets F. Long-term liabilities
For each of the following items, select the letter that identifies the balance sheet category where the item
typically would best appear.
1. Land not currently used in operations 5. Accounts payable
2. Notes payable (due in five years) 6. Store equipment
3. Accounts receivable 7. Wages payable
4. Trademarks 8. Cash

Short Answer

Expert verified

Answer:

Cash comes under the head of the current asset. Category is shown in step 2.

Step by step solution

01

Step-by-Step Solution

Step 1: Definition of current asset

Current assets are those assets that can be transferred into cash easily.

02

Category where the item appears

Land- It would appear in plant assets
Accounts payable- It would appear in current liabilities
Accounts Receivable- It would appear in the current asset
Trademark- It would appear in a plant asset
Notes payable- It would appear in long-term liabilities
Store equipment- It would appear plant assets
Cash- It would appear in current asset

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Most popular questions from this chapter

Question:Prepare year-end adjusting journal entries for M&R Company as of December 31, 2017, for each of the

following separate cases. (Entries can draw from the following partial chart of accounts: Cash; Accounts

Receivable; Interest Receivable; Equipment; Wages Payable; Salary Payable; Interest Payable; Lawn

Services Payable; Unearned Revenue; Revenue; Interest Revenue; Wages Expense; Salary Expense;

Supplies Expense; Lawn Services Expense; Interest Expense.)

a. M&R Company provided \(2,000 in services to customers that are expected to pay the company sometime

in January following the company’s year-end.

b. Wage expenses of \)1,000 have been incurred but are not paid as of December 31.

c. M&R Company has a \(5,000 bank loan and has incurred (but not recorded) 8% interest expense of

\)400 for the year ended December 31. The company will pay the \(400 interest in cash on January 2

following the company’s year-end.

d. M&R Company hired a firm to provide lawn services at a monthly fee of \)500 with payment occurring

on the 15th of the following month. Payment for December services will occur on January 15

following the company’s year-end.

e. M&R Company has earned \(200 in interest revenue from investments for the year ended December

31. The interest revenue will be received on January 15 following the company’s year-end.

f. Salary expenses of \)900 have been earned by supervisors but not paid as of December 31.

Cal Consulting follows the practice that prepayments are debited to expense when paid, and unearned

revenues are credited to revenue when cash is received. Given this company’s accounting practices,

which one of the following applies to the preparation of adjusting entries at the end of its first accounting

period?

a. Unearned fees (on which cash was received in advance earlier in the period) are recorded with a debit

to Consulting Fees Earned of \(500 and a credit to Unearned Consulting Fees of \)500.

b. Unpaid salaries of \(400 are recorded with a debit to Prepaid Salaries of \)400 and a credit to Salaries

Expense of \(400.

c. Office supplies purchased for the period were \)1,000. The cost of unused office supplies of \(650 is

recorded with a debit to Supplies Expense of \)650 and a credit to Office Supplies of \(650.

d. Earned but unbilled (and unrecorded) consulting fees for the period were \)1,200, which are recorded

with a debit to Unearned Consulting Fees of \(1,200 and a credit to Consulting Fees Earned

of \)1,200.

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets

B. Long-term investments

C. Plant assets

D. Intangible assets

E. Current liabilities

F. Long-term liabilities

G. Equity

6. Automobiles

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets

B. Long-term investments

C. Plant assets

D. Intangible assets

E. Current liabilities

F. Long-term liabilities

G. Equity

10. Common stock

Question: Choose from the following list of terms/phrases to best complete the statements below.

a. Fiscal year d. Accounting period g. Natural business year

b. Timeliness e. Annual financial statements h. Time period assumption

c. Calendar year f. Interim financial statements i. Quarterly statements

1. presumes that an organization’s activities can be divided into specific time periods.

2. Financial reports covering a one-year period are known as .

3. A(n)consists of any 12 consecutive months.

4. A(n)consists of 12 consecutive months ending on December 31.

5. The value of information is often linked to its .

See all solutions

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