Following is a classification scheme for a balance sheet. a. current assets b. i
ID: 2425098 • Letter: F
Question
Following is a classification scheme for a balance sheet. a. current assets b. investments c. property, plant, and equipment d. intangible assets e. current liability f. long term liability g. contributed capital h. retained earnings i. not on balance sheet
For each account name below, select the name of the category above to which it belongs. a. Additional paid-in-capital b. Cost of Goods Sold c. Retained Earnings d. Land e. Temporary Investments f. Mortgage Payable (due in ten years) g. Common Stock h. Goodwill i. Notes Payable (due in ten months) j. Special Fund for Purchase of a Building
Explanation / Answer
a. Additional paid-in-capital - Contributed Capital b. Cost of Goods Sold - Retained Earnings (although it does not form a part of the Balance Sheet, yet it is shown in the Income Statement, the balance of which is carried forward to Retained Earnings) c. Retained Earnings - Retained Earnings d. Land - Property, Plant and Equipment e. Temporary Investments - Investments f. Mortgage Payable (due in ten years) - Long Term Liability g. Common Stock - Contributed Capital h. Goodwill - Intangible Assets i. Notes Payable (due in ten months) - Current Liability j. Special Fund for Purchase of a Building - Retained Earnings or alternatively, deduction from Property, Plant and Equipment