Question

The following account titles were drawn from the general ledger of Holt Food Supplies, Incorporated (HFSI): Computers, Operating Expenses, Rent Revenue, Building, Cash, Notes Payable, Land, Utilities Payable, Utilities Expense, Trucks, Gasoline Expense, Retained Earnings, Supplies, Accounts Payable, Office Furniture, Salaries Expense, Common Stock, Service Revenue, Interest Expense, Dividends, Supplies Expense. Required A. List each account title under the element of the accounting equation to which it belongs. B. Will all businesses have the same number of accounts?

Answer 1

Answer:

Assets= Liabilities + Owner's Equity

Part B: No, all companies do not have the same accounts. The accounts depend on the types of business they are doing. For example a tailoring company would own tailoring machines. A washing company would own washing machines etc. However the accounting equation remains the same. Assets= Liabilities + Owner;s Equity. The assets accounts are included in assets and liabilities and Owner's Equity accounts are inluded in liabilities and owner's equity section.

Explanation:

Holt Food Supplies, Incorporated (HFSI)

Assets

Cash

Supplies

Trucks

Computers

Office Furniture

Land

Building

Liabilities

Short term Liabilities

Accounts Payable

Utilities Payable

Long Term Liabilities

Notes Payable

Stockholder's Equity

Dividends

Common Stock

Retained Earnings(+ Net profit )*

Rent Revenue

Service Revenue

Operating Expenses

utilities Expense

salaries expense

supplies expense

interest expense

The above accounts are included in the balance sheet which is given by the equation

Assets= Liabilities + Retained Earnings

The net profit is calculated from the income statement in which the revenues are added and expenses are subtracted from them to get the net profit. That profit is added to the retained earnings of the balance sheet.

Net Profit =  Revenue - Expenses