Problem 2 Matching 10 points fill in the appropriate code le

Problem 2: Matching (10 points) fill in the appropriate code letter to indicate whether the item is an For the items listed below, asset, liability, or stockholders\' equity item Code Asset Liability Stockholders\' Equity SE 1. Rent Expense 6. Cash A 7. Accounts Receivable SE 8. Retained Earnings 9. Service Revenue 10. Notes Payable A 2 Equipment 3. Accounts Payable 4. Common Stock 5. Insurance Expense

Solution

Note: 10th item i.e Notes payable is a liability (L) and not an asset.

all expenses and revenues will be useful in determining the net income for the period.

This net income will be added to retained earnings which is a part of stock holders equity.

So expenses and revenues will be stock holder\'s equity (SE) items.

1.Rent expense	SE
2.Equipment	A
3.Accounts payable	L
4.Common stock	SE
5.Insurance expense	SE
6.Cash	A
7.Accounts receivable	A
8.Retained earnings	SE
9.Service Revenue	SE
10.Notes payable	L