Presented below are a number of balance sheet accounts of Deep Blue Something, Inc.
1. Investment in Preferred Stock - Investments
2. Treasury Stock - Capital Stock
3. Common Stock -
4. Cash Dividends Payable
5. Accumulated Depreciation
6. Warehouse in Process of Construction
7. Petty Cash
8. Accrued Interest on Notes Payable
10. Trading Securities
11. Income Taxes Payable
12. Unearned Subscription Revenue
13. Work in Progress
14. Accrued Vacation Pay
Indicate the proper balance sheet classification for each of the above accounts.
1. Long term assets following PP&E on the balance sheet (5 below) assuming the intent is to hold for investment
2. Equity - a negative capital account disclosed separately within equity
3. Equity - a separately stated component of the equity section
4. Current liabilities assuming the dividends will be paid within one year
5. Plant, property and equipment - as a negative (reduction) of depreciable assets and stated separately
6. Plant, property and equipment ...
The solution provides the classfiication for the type of account listed and also gives an explanation for the placement.