Question

In: Accounting

The following accounts appeared in recent financial statements of Continental Airlines:

The following accounts appeared in recent financial statements of Continental Airlines:

 

Accounts Payable                   Flight Equipment

Air Traffic Liability                   Landing Fees

Aircraft Fuel Expense             Passenger Revenue

Cargo and Mail Revenue        Purchase Deposits for Flight Equipment

Commissions                           Spare Parts and Supplies

 

Identify each account as either a balance sheet
 account or an income statement account. For each balance sheet account, identify it as an asset, a liability, or owner’s equity. For each income statement account, identify it as a revenue or an expense.

 

 

Solutions

Expert Solution

(1) Accounts payable: Balance sheet account and it is a Liability.

(2) Air Traffic Liability: Balance sheet account and it is also a liability.

(3) Aircraft fuel expense: Income statement and it is an expense account.

(4) Cargo and Mail revenue: Income statement and it is a revenue account.

(5) Commissions: Income statement account and it is revenue account.

(6)  Flight equipment: Balance sheet account and it is an asset.

(7) Landing Fees: Income statement account and it is an expense.

(8) Passenger revenue: Income statement account and it is a revenue account

(9) Purchase Deposits for flight equipment: If purchase Deposit is paid in the form of cash, it means a reduction in the assets side. The remaining balance to be paid is shown in the form of liability.

(10)   Spare parts and supplies: Balance sheet account and it is an asset

 

 

Raffay answered 2 years ago
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