Question

A An accountant who just started their job is asking you for help in classifying each of the below accounts into the appropriate current asset or current liability account when preparing the company's Balance Sheet (year-end date of December 31st). He has already figured out which accounts belong in cash, but is having trouble with the rest (.e., the accounts listed below). For each account, please indicate the account category to which it belongs. If an account does not fit into any of these categories, please select the category “Not a Current Asset Current Liability." You may use account answers more than once. Insurance on building (for the next 6 months) that the company paid in Short Term Note Payable advance B. Prepaid Expenses Investment in stock of another company (purchased as a short-term Unearned Revenue "parking place for cash) D. Accounts Receivable The estimated cumulative wear and tear on the company's machines Not a Current Asset or Current Liability Goods that the company bought from a supplier to sell to its customers Marketable Securities Amounts related to sales on credit that the company will collect in the future Inventory Bank loan (that will be repaid in 9 months) Accrued Liabilities Amounts that the company paid for employee wages related to last week's '. Accounts Payable work F. H Amounts that the company owes to the IRS for taxes that they expect to pay within 3 months Amounts owed to the company's suppliers related to goods that they purchased for resale Cash payments in advance from customers for services that the company will provide in 2 months Rent for last month that has not been paid Note payable (that will be repaid in 18 months) Equipment in the company's factory

Answer 1

Classification of Accounts into the appropriate Category
Sl No.	Name of Account	Account Category
1	Insurance on Building (for the next 6 monts) that the company paid in advance	Prepaid Expenses
2	Investment in stock of another company (Purchase as a short term "parking place" for Cash	Marketable Securities
3	The estimated cumulative wear and tear on the company's machine	Not a Current Asset or Current Liability
4	Goods that the company bought from a supplier to sell to its customer	Accounts Payable
5	Amount related to sales on credit that the company will collect in the future	Accounts Receivable
6	Bank Loan (that will be repaid in 9 months)	Short Term Note Payable
7	Amounts that the company paid for employee wages related to last week's work.	Not a Current Asset or Current Liability
8	Amounts that the company's owes to the IRS for taxes that they expect to pay within 3 months	Accrued Liabilities
9	Amount owed to the company's supplier related to goods that they purchase for resale	Inventory
10	Cash payments in advance from customers for services that the company will provide in 2 months	Unearned Revenue
11	Rent for last month that has not yet been paid	Accrued Liabilities
12	Note Payable (that will be repaid in 18 months)	Not a Current Asset or Current Liability
13	Equipment in the company's factory	Not a Current Asset or Current Liability