The following items relate to business transactions involving K · Swiss Inc.
a. Coins and currency
b. Amounts K · Swiss owes to suppliers of watches
c. Amounts K · Swiss can collect from customers
d. Amounts owed to bank for loan to buy building
e. Property on which buildings will be built
f. Amounts distributed from profits to stockholders
g. Amounts earned by K · Swiss by selling watches
h. Unused paper in K · Swiss head office
i. Cost of paper used up during month
j. Amounts contributed by stockholders for K · Swiss stock
Required:
1. Identify an appropriate label (account name) for each item as it would be reported in the company’s financial statements. Choose from the following: Accounts Payable, Accounts Receivable, Cash, Common Stock, Dividends, Land, Notes Payable, Sales Revenue, Supplies, and Supplies Expense.
2. Classify each item as an asset (A), liability (L), stockholders’ equity (SE), revenue (R), or expense (E).