One account that would be on a balance sheet would be the income taxes payable line item and is self-explanatory as it is reserved for any taxes due to all debtors within the next 12 months (Merrill Lynch, 2000). One account that would be found on an income statement would be the cost of the sales line item. This account represents the expenses incurred in producing the final sale able product and includes paid labor, the cost of items needed to make the final product, and the costs that are necessary to create the finished product without a direct connection to its completion such as the costs associated with renting a building and paying utilities so that the employees have a place to work from (Merrill Lynch, 2000). These accounts are on the correct statements. Why is understanding which statement accounts go on so important?