Account classifications include assets, liabilities, stockholders’ equity, dividends, revenues, and expenses.

Required:

For each transaction, indicate whether the related account would be classified in the balance
sheet as

(a) An asset,

(b) A liability,

(c) Stockholders’ equity; in the income statement as

(d) A revenue or

(e) An expense; or in the statement of stockholders’ equity as

(f) A dividend.

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Account Classifications Accounts Related Transactions 1. Common stock Sale of common stock to investors. 2. Equipment Salaries payable Service revenue Equipment used for operations. Amounts owed to employees. Sales of services to customers. 3. 4. Utilities expense Supplies Research and 5. Cost of utilities. Purchase of office supplies. Cost of research and development. 6. 7. development expense Land Income tax payable Interest payable 8. Property used for operations. 9. Amounts owed to the IRS for taxes. 10. Amount of interest owed on borrowing.