Question

Balance Sheet Accounts and Their Use

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account. An account title may be used more than once or not at all.

Cash	Accounts Receivable	Notes Receivable
Prepaid Asset	Land	Buildings
Investments	Accounts Payable	Notes Payable
Taxes Payable	Retained Earnings	Common Stock
Preferred Stock

1. A written obligation to repay a fixed amount, with interest, at some time in the future

2. Twenty acres of land held for speculation

3. An amount owed by a customer

4. Corporate income taxes owed to the federal government

5. Ownership in a company that allows the owner to receive dividends before common shareholders receive any distributions

6. Five acres of land used as the site for a factory

7. Amounts owed on an open account to a vendor, due in 90 days

8. A checking account at a bank

9. A warehouse used to store equipment

10. Claims by the owners on the undistributed net income of a business

11. Rent paid on an office building in advance of use of the facility

Answer 1

1. A written obligation to repay a fixed amount, with interest, at some time in the future	Notes Payable
2. Twenty acres of land held for speculation	Investments
3. An amount owed by a customer	Accounts Receivable
4. Corporate income taxes owed to the federal government	Taxes Payable
5. Ownership in a company that allows the owner to receive dividends before common shareholders receive any distributions	Preferred Stock
6. Five acres of land used as the site for a factory	Land
7. Amounts owed on an open account to a vendor, due in 90 days	Accounts Payable
8. A checking account at a bank	Cash
9. A warehouse used to store equipment	Buildings
10. Claims by the owners on the undistributed net income of a business	Retained Earnings
11. Rent paid on an office building in advance of use of the facility	Prepaid Asset