What kind of accounts are the following (asset, liability, SE, revenue, expense) and what are their...

What kind of accounts are the following (asset, liability, SE, revenue, expense) and what are their normal balances. Also which specific type of assets, liabilities, or expenses do these fall under on the financial statements?

Expert Solution

ANS: There are mainly two types of account -

Personal account which is further categorised into Natural, Artificial, Representative Personal account
Impersonal Account which is categorised into Real Account & Nominal Account; Real Account is again divided into Tangible & Intangible account.

So,

Asset is a Real Account as their balance is being carried forward to the next accounting year

Liability is a Representative Personal Account which includes Prepaid or outstanding, Debtors & Creditors etc.

Revenue & Expense is a Nominal Account as their balances are confined to only one accounting year.

Types are as follows -

Assets includes - Current, Non-Current (Fixed), Tangible (Physical) , Intangible, Operating, Non-Operating. Eg -Cash, Inventory , Plant & Machinery, patents & Copyrights etc.
Liabilities Includes - Current , Non- Current & Contingent Liabilities. Eg - Creditor, Wages outstanding, secured loan, Litigation expenses.
Expenses Incudes - Operating, Non- Operating, Financial, Extra- ordinary expenses. Eg- Salary, Rent, advertisement, commission, Bad debt etc.

jeff jeffy answered 1 year ago

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