Question

Indicate whether each of these items is an asset, a liability, or part of stockholders’ equity.

Answer 1

Answer:

a. Accounts Receivables is an asset as in exchange of that cash benefit will occur, it is an asset to company.

b. Salary and wages payable is a liability as there will be some payment in future towards such liability in cash to be settled.

c. Equipment is an asset as with this capital asset or non capital asset the company tends to drive future benefits, as it will be used in production.

d. Supplies is an asset as this is part of inventory as this is further used in production of goods.

e. Common stock is stockholder's equity as this is what investors invest in and then generate profits, from the running of business.

f. Notes Payable is a liability as in future some cash is to be paid or some asset has to be forgone for this liability to settle.