Question

Classify the following accounts according to the preferred and ordinary balance sheet presentation. 1. Bond sinking fund 2. Common stock dividend distributable 3. Appropriation for plant expansion 4. Bank overdraft 5. Bonds payable (due 2020) 6. Premium on Common stock 7. Securities owned by another company which are collateral for that company's note 8. Equity investments (trading) 9. Inventory 10. Discount on bonds payable 11. Patents 12. Unearned rent revenue

Answer 1

Answer:

Explanation:

1. Bond sinking fund - Investment

2. Common stock dividend distributable - common stock

3. Appropriation for plant expansion - Retain Earnings

4. Bank overdraft - Current Liability

5. Bonds payable (due 2020) - Long term Liability

6. Premium on Common stock - Additional paid in capital

7. Securities owned by another company which are collateral for that company's note - Items not recorded in the balance sheet

8. Equity investments (trading) - Current Asset

9. Inventory - Current Assets

10. Discount on bonds payable - Current Liability

11. Patents - Intangible Assets

12. Unearned rent revenue - Current Liability