Question

Reading a chart of accounts LO C3 A chart of accounts is a list of all ledger accounts and an identification number for each. Identify the following accounts as either an asset (A), liability (L), equity (EQ), revenue (R), or expense (E) account.

a. Sales
b. Store Supplies
c. Commissions Earned
d. Utilities Expenses
e. Insurance Payable
f. Advertising Expense
g. Notes Payable
h. Owner, Capital
i. Accounts Payable

Answer 1

Answer:

Explanation:

As we know that

All revenues generated and expenses incurred during a given period are reported in the income statement.

The balance sheet records the assets and the liabilities of the business organization

So, the categorization is shown below:

a. Sales  = revenue (R). It is shown in the credit side of the income statement

b. Store Supplies  = Current asset reflects on the balance sheet

c. Commissions Earned  = revenue (R). It is shown in the credit side of the income statement

d. Utilities Expenses  = expense (E). It is shown in  debit side of the income statement

e. Insurance Payable =  liability (L). It reflects on the liabilities side of the balance sheet as a current liabilities

f. Advertising Expense  =  expense (E). It is shown in  debit side of the income statement.

g. Notes Payable  =  liability (L). It reflects on the liabilities side of the balance sheet

h. Owner, Capital  =  equity (EQ) = It is shown on the balance sheet i. Accounts Payable =  liability (L). It reflects on the liabilities side of the balance sheet as current liabilities