Asset Accounts: One Of The Three Major Types Of Accounts

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TASK 2 A. ASSET ACCOUNTS Asset accounts are one of the three major classifications of balance sheet accounts: • Assets • Liabilities • Stockholders' equity (or owner's equity) The ending balances in the balance sheet accounts will be carried forward to the next accounting year. Hence the balance sheet accounts are called permanent accounts or real accounts. The asset accounts are usually listed first in the company's chart of accounts and in the general ledger. In the general ledger the asset accounts will normally have debit balances. The balances in some of the asset accounts will be combined and presented as a single amount when the balance sheet is prepared. For example, if a company has ten checking accounts, the balances will be combined and the total amount will be reported on the balance sheet as the asset Cash. Assets include the things or resources that a company owns, that were acquired in a transaction, and have a future value that can be measured. Assets also include some costs that are prepaid or deferred and will become expenses as the costs are used up over time. Here are some examples of asset accounts: • Cash • Short-term Investments • Accounts Receivable • Allowance for Doubtful Accounts (a contra-asset account) • Accrued Revenues/Receivables • Prepaid Expenses • Inventory • Supplies •…show more content…
Revenue is shown usually as the top item in an income (profit and loss) statement from which all charges, costs, and expenses are subtracted to arrive at net income. Revenues increase equity and result from a company’s earning activities. Examples are consulting services provided, sales of products, facilities rented to others, and commissions from services. In tuition centre, revenues are teaching tuition fees
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