Question

Indicate whether the following items would appear on the income statement (IS), balance sheet (BS), or retained earnings statement (RE). _____a.Notes payable _____b.Advertising expense _____c.Common stock _____d.Cash _____e.Service revenue _____f.Dividends

Answer 1

Answer:

.Notes payable - balance sheet(BS)

Advertising expense - income statement(IS)

Common stock - balance sheet(BS)

Cash - balance sheet(BS)

Service revenue - income statement(IS)

Dividends - retained earnings statement (RE)

Explanation:

The income statement shows the sales and expenses of an entity.

The balance sheet shows the assets, liabilities and owner's equity while the retained earnings statement shows the movements in the retained earnings account.

As such,

a.Notes payable -  This is a liability hence found in the balance sheet

b.Advertising expense - This is an expense hence it is found in the income statement

c.Common stock - This is an element of the owner's equity hence it is a balance sheet item

d.Cash - This is an asset hence a balance sheet item

e.Service revenue - This is an income item hence found in the income statement

f.Dividends - This is one of the reasons for movements in retained earnings balance hence it is found in retained earnings statement (RE)

Answer 2

Answer:

Notes Payable - Balance sheet

Advertising expense - Income statement

Common stock - balance sheet

Cash - balance sheet

Service revenue - income statement

Dividends - Statement of Retained Earnings

Explanation:

A. Notes payable will appear on Balance sheet(Under Liability)

B. Advertising expense will appear on Income statement(Under expense)

C. Common stock will appear on Balance sheet(Under Equity)

D. Cash will appear on Balance sheet(Under Asset)

E. Service Revenue will appear on Income statement(Under revenue or sales or income)

F. Dividends will appear on Statement of Retained Earnings which is the same thing as Statement of Owner's Equity