Chapter 3: Q7Q (page 127)

Indicate whether each of the following items is a real or nominal account and whether it appears in the balance sheet or the income statement.
(a) Prepaid Rent.
(b) Salaries and Wages Payable.
(c) Inventory.
(d) Accumulated Depreciation—Equipment.
(e) Equipment.
(f) Service Revenue.
(g) Salaries and Wages Expense.
(h) Supplies.

Expert verified

The income statement includes income and expenses, whereas the balance sheet includes assets, liabilities, and equities.

Step by step solution

The term prepaid rent defines the amount of money paid by the tenant to the landlord in advance or before the occurrence of the due date.

Indicating the above items is a real or nominal account, or it appears in the balance sheet or income statement are as described as follows:

	Items	Real or Nominal Account	Balance Sheet or Income Statement
(a)	Prepaid Rent	Real Account	Balance Sheet
(b)	Salaries and wages Payable	Real Account	Balance Sheet
(C)	Inventory	Real Account	Balance Sheet
(d)	Accumulated Depreciation - Equipment	Real Account	Balance Sheet
(e)	Equipment	Real Account	Balance Sheet
(f)	Service Revenue	Nominal Account	Income Statement
(g)	Salaries and wages expenses	Nominal Account	Income Statement
(h)	Supplies	Real Account	Balance Sheet

Unlock Step-by-Step Solutions & Ace Your Exams!

Over 30 million students worldwide already upgrade their learning with Vaia!

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

ED BRADLEY CO. Worksheet (PARTIAL) For The Month Ended April 30, 2017
	Adjusted Trial Balance		Income Statement		Balance Sheet
Account Titles	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Cash	18,972
Accounts Receivable	6,920
Prepaid Rent	2,280
Equipment	18,050
Accumulated Depreciation—Equipment		4,895
Notes Payable		5,700
Accounts Payable		4,472
Common Stock		34,960
Retained Earnings—April 1, 2017		1,000
Dividends	6,650
Service Revenue		12,590
Salaries and Wages Expense	6,840
Rent Expense	3,760
Depreciation Expense	145
Interest Expense	83
Interest Payable		83