Classifying Accounts Within the Accounting Equation Listed here are the account names

Chapter 3, Problem 3-6

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QUESTION:

Classifying Accounts Within the Accounting Equation 

Listed here are the account names and balances for Wilderness Rentals.

Accounts Payable                  $ 7,000            Cash in Bank                    $ 5,000

Accounts Receivable                2,000            Office Equipment                 3,000

Camping Equipment               12,000            Ronald Hicks, Capital        15,000

Instructions Using these account names and balances:

1. List and total the assets of the business.

2. Determine the amount owed by the business.

3. Give the amount of the owner's equity in the business.Design a diagram that shows the accounting equation

Questions & Answers

QUESTION:

Classifying Accounts Within the Accounting Equation 

Listed here are the account names and balances for Wilderness Rentals.

Accounts Payable                  $ 7,000            Cash in Bank                    $ 5,000

Accounts Receivable                2,000            Office Equipment                 3,000

Camping Equipment               12,000            Ronald Hicks, Capital        15,000

Instructions Using these account names and balances:

1. List and total the assets of the business.

2. Determine the amount owed by the business.

3. Give the amount of the owner's equity in the business.Design a diagram that shows the accounting equation

ANSWER:

                                                                  Step 1 of 5

Accounts classification refer to the segregation of different properties of the same nature under the same head. All the accounts come under three main heads – Assets, Liabilities, and Equity.

                                                                 

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