Balances for each of the following accounts appear in an adjusted trial balance. Identify each as an asset, liability, revenue, or expense.

Question

Line Item Description Classification
1. Accounts Receivable
2. Equipment
3. Fees Earned
4. Insurance Expense
5. Prepaid Advertising
6. Prepaid Rent
7. Rent Revenue
8. Salary Expense
9. Salary Payable
10. Supplies
11. Supplies Expense
12. Unearned Rent

Answer 1

Here is the classification for each line item as an asset, liability, revenue, or expense:

| Line Item Description | Classification | |---------------------------|----------------| | 1. Accounts Receivable | Asset | | 2. Equipment | Asset | | 3. Fees Earned | Revenue | | 4. Insurance Expense | Expense | | 5. Prepaid Advertising | Asset | | 6. Prepaid Rent | Asset | | 7. Rent Revenue | Revenue | | 8. Salary Expense | Expense | | 9. Salary Payable | Liability | | 10. Supplies | Asset | | 11. Supplies Expense | Expense | | 12. Unearned Rent | Liability |

This classification helps in understanding the nature and purpose of each account in the context of financial reporting.