Test your accounting skills with these exercises on Elements of Accounting under the Fundamental Accounting Concepts tutorials.
Instructions: For the exercises below, write your answers on a piece of paper. When you're done, check the answers page here to see if you got them.
A. For each item, indicate whether it is an Asset, a Liability, or Capital in Column A. If the item is an asset or a liability, indicate if it is Current or Non-current in Column B. If the item is capital, place N/A in Column B.
|1. Tools and equipment||Asset||Non-current|
|2. Salaries payable|
|3. Additional investment of owner|
|4. Cash on hand|
|5. Cash deposited in Prime Bank|
|6. Delivery truck|
|7. Obligation to pay supplier|
|8. Loan from bank, 5 years|
|9. Investment in long-term bonds|
|10. Prepaid insurance|
|11. Patent (an intangible)|
|12. Withdrawals made by owner|
|13. Merchandise for sale|
|14. Building used as office space|
|15. Accounts receivable|
B. For each item, indicate whether it is an Income or an Expense. If it is neither income nor expense, write its proper classification.
|1. Rent revenue||Income|
|2. Rent payable|
|3. Salaries of employees|
|5. Light, water, and electricity|
|6. Loss from flood|
|7. Accumulated depreciation|
|8. Prepaid advertising|
|9. Delivery costs|
|10. Gain on sale of land|
C. For each of the following accounts, indicate whether it is an Asset, Liability, Income, or Expense. If it is an asset or a liability, specify whether it is current or non-current.
|1. Merchandise Inventory||Asset||Current|
|2. Accounts Payable|
|3. Utilities Expense|
|4. Service Revenue|
|5. Computer Equipment|
|6. Office Supplies|
|7. Bonds Payable|
|10. Furniture and Fixtures|