Question

List the titles of the asset, liability and equity accounts that you would see on the balance sheets of both manufacturing and merchandising organizations.

Answer 1

Balance sheets of both manufacturing and merchandising organizations will feature asset accounts like Cash and Inventory, liability accounts such as Accounts Payable and Long-term Debt, and equity accounts including Common Stock and Retained Earnings. These are represented in a T-account, which is a two-column format showing assets on one side and liabilities and equity on the other.

Step-by-step explanation:

On balance sheets of both manufacturing and merchandising organizations, you would typically see the following types of accounts under assets, liabilities, and equity:

• Asset accounts might include Cash, Accounts Receivable, Inventory, Prepaid Expenses, Property, Plant, and Equipment.
• Liability accounts could include Accounts Payable, Accrued Expenses, Notes Payable, Taxes Payable, and Long-term Debt.
• Equity accounts often feature Common Stock, Retained Earnings, and Paid-in Capital.

A T-account is a visual representation of these accounts on a balance sheet, shown in a two-column format with a vertical line down the middle and a horizontal line under the column headings for "Assets" and "Liabilities," forming a T-shape. This format provides a clear overview of a company's financial standing, reflecting the relationship between assets, liabilities, and shareholders' equity, which comprises bank capital.