Question

For each item below, indicate to which category of elements of financial statements it belongs.

(a) Retained earningsselect a category of elements of financial statements
(b) Salesselect a category of elements of financial statements
(c) Additional paid-in capitalselect a category of elements of financial statements
(d) Inventoryselect a category of elements of financial statements
(e) Depreciationselect a category of elements of financial statements
(f) Loss on sale of equipmentselect a category of elements of financial statements
(g) Interest payableselect a category of elements of financial statements
(h) Dividendsselect a category of elements of financial statements
(i) Gain on sale of investmentselect a category of elements of financial statements
(j) Issuance of common stockselect a category of elements of financial statements

Answer 1

(a) Retained earnings – EQUITY

(b) Sales – REVENUES

(c) Additional paid-in capital – EQUITY

(d) Inventory – ASSETS

(e) Depreciation – EXPENSES

(f) Loss on sale of equipment – EXPENSES

(g) Interest payable – LIABILITIES

(h) Dividends – EQUITY

(i) Gain on sale of investment– REVENUES

(j) Issuance of common stock – EQUITY

Step-by-step explanation:

ASSETS - Inventory: A set of goods destined for sale in the main activity of the company

LIABILITIES - Interest payable: interests whose period has already expired and therefore is a debt

EQUITY - Retained earnings: positive results that the company has given a particular destination (for example, the purchase of a fixed asset, therefore they will not be distributed) - Additional paid-in capital: When issuing the shares, the shareholders pay more than the nominal value of the share. In this account, this additional value is placed - Dividends: earnings reserved for distribution among shareholders - Issuance of common stock: nominal value of shares when issued

REVENUES - Sales: income obtained from the main activity of the company - Gain on sale of investment: results obtained by investments that the company has .

EXPENSES - Depreciation: Represents the wear and tear of the use of fixed assets over time - Loss on sale of equipment: When a fixed asset is sold and its net book value (historical cost - accumulated depreciation) is lower than that obtained by its sale, the loss for this operation is placed in this account