The following lettered items represent a classification scheme for a balance she

Question

The following lettered items represent a classification scheme for a balance sheet, and the numbered items represent accounts found on balance sheets. In the blank next to each account, write the letter indicating to which category it belongs. A. Current assets B. Long-term investments C. Property, plant, and equipment D. Intangible assets E. Current liabilities F. Long-term liabilities G. Owner's equity H. Not on the balance sheet 1. Accumulated Depreciation 2. Owner's Capital 3. Interest Expense 4. Salaries and Wages Payable 5. Owner's, Drawings 6. Inventory 7. Patents 8. Prepaid Rent 9. Mortgage Payable 10. Land Held for Investment

Explanation / Answer

S. No Item Name Classification Explanation 1 Accumulated Depreciation C Accumulated Depreciation is total depreciation and is charged off against Fixed Asset in BS 2 Owner Capital G 3 Interest Expense H Part of Profit & Loss Account 4 Salaries & Wages Payable E 5 Owner Drawing G Netted off with Owners Capital Balance 6 Inventory A 7 Patents D 8 Prepaid Rent A Advance rent paid, is a Current Asset 9 Mortgage Payable F Long Term loans & Advances 10 Land Held for Investment B Long term Investments

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