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Indicate whether each of the following would be reported in the financial statements as a (a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense: 1. Truck 2. Accumulated Depreciation 3. Telephone Expense 4. Fees Earned 5. Wages Payable 6. Prepaid Insurance 7. Office Supplies 8. Dining Expense 9. Unearned Rent

Answer :

Answer:

1. Truck -  (b) property, plant, and equipment

A Truck is an asset that is bought with the intentio of being used for over a year, therefore, it falls under this category.

2. Accumulated Depreciation - (e) expense

Accumulated depreciation is an expense that is charged against the value of an asset.

3. Telephone Expense - (e) expense

As the name implies, a telephone expense is an expense (part of overhead).

4. Fees Earned - (d) revenue

Fees earned are revenue that the company earns for providing a good or service, or because of an investment activity.

5. Wages Payable - (c) current liability

Wages payable are current liabilities because they have to be paid in a period of time shorter than a year (more likely shorter than a month). In accrual accounting, they are considered accrued expenses. (expeneses that have already been incurred, but are yet to be paid).

6. Prepaid Insurance - (a) current asset

Prepaid insurance is a current asset because insurance contracts are usually signed for one year.

7. Office Supplies - (e) expense

Office supplies are expenses because they have to be incurred, but they do not significantly help the company produce its goods or services.

8. Dining Expense - (e) expense

This is an expense for self-explanatory reasons.

9. Unearned Rent - (c) current liability

Because it represents money that you owe, not that you possess.

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