Question

Indicate whether the following items would appear on the income statement, balance sheet, or owner's equity statement.

(a) Notes payable
(b) Advertising expense
(c) Owner's capital
(d) Cash
(e) Service revenue

Answer 1

Notes payable would appear on the balance sheet, advertising expense on the income statement, owner's capital on the owner's equity statement, cash on the balance sheet, and service revenue on the income statement.

Step-by-step explanation:

(a) Notes payable: This item would appear on the balance sheet as a liability because it represents the amount of money a company owes to its creditors.

(b) Advertising expense: This item would appear on the income statement as an expense because it represents the cost of promoting a company's products or services.

(c) Owner's capital: This item would appear on the owner's equity statement as it represents the investment made by the owner into the business.

(d) Cash: This item would appear on the balance sheet as an asset because it represents the amount of money a company has on hand.

(e) Service revenue: This item would appear on the income statement as revenue because it represents the income generated from providing services to customers.