Question

Indicate whether each of the following would be reported in the financial statements as a (a) current asset, (b) current liability, (c) revenue, or (d) expense: 1. Supplies 2. Unearned Fees 3. Prepaid Advertising 4. Advertising Expense 5. Supplies Expense 6. Prepaid Insurance 7. Accounts Payable 8. Fees Earned

Answer 1

Answer:

Explanation:

In the classified balance sheet, we summarize the asset and liabilities into various types

Like assets are divided into fixed assets, current assets, and intangible assets.

Likewise, liabilities are also divided into current liabilities, long term liabilities

In every balance sheet, the accounting equation is used that means

Total assets = Total liabilities + Shareholder equity\

And, In the income statement, the total revenues and the total expenses are recorded.  

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

So,

1. Supplies - Current Asset

2. Unearned Fees - Current liabilities

3. Prepaid Advertising -  Current Asset

4. Advertising Expense - Expense

5. Supplies Expense - Expense

6. Prepaid Insurance - Current Asset

7. Accounts Payable - Current liabilities

8. Fees Earned - Revenue