Question

Eskimo Pie Corporation markets a broad range of frozen treats, including its famous Eskimo Pie ice cream bars. The following items were taken from a recent income statement and balance sheet.
In each case, identify whether the item would appear on the balance sheet or income statement.
(a) Income tax expense
(b) Inventory
(c) Accounts payable
(d) Retained earnings
(e) Equipment earnings
(f) Sales revenue
(g) Cost of goods sold
(h) Common stock
(i) Accounts recieable
(j)Interest expense

Answer 1

Answer:

1. BALANCE SHEET:

(b) Inventory

(c) Accounts payable

(d) Retained earnings

(h) Common stock

(i) Accounts receivable

     2. INCOME STATEMENT:

(b) Inventory

(c) Accounts payable

(d) Retained earnings

(h) Common stock

(i) Accounts receivable

Explanation:

The balance sheet identifies the productive resources (assets) that a firm has for the development of its activities, as well as how they are financed. Those funds may come from creditors (Obligation with creditors - Liabilities) and owners (Issuing equity shares - Shareholders' equity).

Instead, The Income Statement shows the incomes and loss than the firm operation has produced during the accountable period. It starts with Revenues and Cost of Goods to get the Gross Net Profit and follows with others incomes and loss to get the Net Income of the period.