Part II Instructions The following lettered item indicating

Part II. Instructions: The following lettered item indicating which category it belongs in. (You may use a Balance Sheet: (14 Points) s represent a classification scheme for a Balance Sheet, esent accounts. Using the scantron provided, darken the letter letter more that once). a. Current Asset b. Property, Plant and Equipment Asset c. Current Liability d. Long-Term Liability e. Stockholders\' Equity 31. Merchandise Inventory 32. Unearned Professional Fees 33. Interest Payable 34. Machinery and Equipment 35. Retained Earnings 36. Accumulated Depreciation 37. Prepaid Insurance 38. Allowance for doubtful accounts 39. Furniture 40. Mortgage Note Payable due in 20 years 41. Premium on Bonds (due in 2010) 42. Notes Receivable due in 30 days 43. Capital Stock 44. Office Supplies

Solution

Item category of item    explanation Merchandise inventory current asset inventory is the current asset . It is the tangible property owned by business Unearned professional fee current liability bisiness organization collects from customers in an advance Interest payable current liability it is the future obligation you have to pay . Machinery equipment property ,plant and equipment account tangible and fixed assets these give a long life utility to the business Retained earnings share holders equity every year profits are retained for future needs of business Accumulated depreciation property ,plant and equipment account it belongs to fixed assets and it is the total depreciation of a particular asset over the life time of an asset Pre paid insurance current asset the expense paid in advance is called pre paid expense Allowances for doubtful accounts current asset these are related to the accounts receivables it effects the net receivables Furniture property plant and equipment account it is the fixed asset useful to the business for a long time Mortgage notes payable due in 20years long term liability it is the long term liability because payable in 20years Premium on bonds due in 2010 long term liability it is also long term liability it increases the bonds payable Notes receivable due in 30days current asset income receivable from customers Capital stock share holders equity it is the part of the share holders equity Office supplies current assets it is the current asset