ACCOUNTING PRINCIPLES 12TH EDITION

ACCOUNTING
PRINCIPLES
TWELFTH EDITION

,
, ACCOUNT CLASSIFICATION AND PRESENTATION
Normal
Account Title Classification Financial Statement Balance
A
Accounts Payable Current Liability Balance Sheet Credit
Accounts Receivable Current Asset Balance Sheet Debit
Accumulated Depreciation—Buildings Plant Asset—Contra Balance Sheet Credit
Accumulated Depreciation—Equipment Plant Asset—Contra Balance Sheet Credit
Advertising Expense Operating Expense Income Statement Debit
Allowance for Doubtful Accounts Current Asset—Contra Balance Sheet Credit
Amortization Expense Operating Expense Income Statement Debit
B
Bad Debt Expense Operating Expense Income Statement Debit
Bonds Payable Long-Term Liability Balance Sheet Credit
Buildings Plant Asset Balance Sheet Debit
C
Cash Current Asset Balance Sheet Debit
Common Stock Stockholders’ Equity Balance Sheet Credit
Copyrights Intangible Asset Balance Sheet Debit
Cost of Goods Sold Cost of Goods Sold Income Statement Debit
D
Debt Investments Current Asset/Long-Term Balance Sheet Debit
Investment
Depreciation Expense Operating Expense Income Statement Debit
Discount on Bonds Payable Long-Term Liability—Contra Balance Sheet Debit
Dividends Temporary account closed Retained Earnings Debit
to Retained Earnings Statement
Dividends Payable Current Liability Balance Sheet Credit
E
Equipment Plant Asset Balance Sheet Debit
F
Freight-Out Operating Expense Income Statement Debit
G
Gain on Disposal of Plant Assets Other Income Income Statement Credit
Goodwill Intangible Asset Balance Sheet Debit
I
Income Summary Temporary account closed Not Applicable (1)
to Retained Earnings
Income Tax Expense Income Tax Expense Income Statement Debit
Income Taxes Payable Current Liability Balance Sheet Credit
Insurance Expense Operating Expense Income Statement Debit
Interest Expense Other Expense Income Statement Debit
Interest Payable Current Liability Balance Sheet Credit
Interest Receivable Current Asset Balance Sheet Debit
Interest Revenue Other Income Income Statement Credit
Inventory Current Asset Balance Sheet (2) Debit

, Normal
Account Title Classification Financial Statement Balance
L
Land Plant Asset Balance Sheet Debit
Loss on Disposal of Plant Assets Other Expense Income Statement Debit
M
Maintenance and Repairs Expense Operating Expense Income Statement Debit
Mortgage Payable Long-Term Liability Balance Sheet Credit
N
Notes Payable Current Liability/ Balance Sheet Credit
Long-Term Liability
O
Owner’s Capital Owner’s Equity Owner’s Equity and Credit
Balance Sheet
Owner’s Drawings Temporary account closed Owner’s Equity Debit
to Owner’s Capital
P
Patents Intangible Asset Balance Sheet Debit
Paid-in Capital in Excess of Par— Stockholders’ Equity Balance Sheet Credit
Common Stock
Paid-in Capital in Excess of Par— Stockholders’ Equity Balance Sheet Credit
Preferred Stock
Preferred Stock Stockholders’ Equity Balance Sheet Credit
Premium on Bonds Payable Long-Term Liability Balance Sheet Credit
Prepaid Insurance Current Asset Balance Sheet Debit
Prepaid Rent Current Asset Balance Sheet Debit
R
Rent Expense Operating Expense Income Statement Debit
Retained Earnings Stockholders’ Equity Balance Sheet and Retained Credit
Earnings Statement
S
Salaries and Wages Expense Operating Expense Income Statement Debit
Salaries and Wages Payable Current Liability Balance Sheet Credit
Sales Discounts Revenue—Contra Income Statement Debit
Sales Returns and Allowances Revenue—Contra Income Statement Debit
Sales Revenue Revenue Income Statement Credit
Selling Expenses Operating Expense Income Statement Debit
Service Revenue Revenue Income Statement Credit
Stock Investments Current Asset/Long-Term Balance Sheet Debit
Investment
Supplies Current Asset Balance Sheet Debit
Supplies Expense Operating Expense Income Statement Debit
T
Treasury Stock Stockholders’ Equity—Contra Balance Sheet Debit
U
Unearned Service Revenue Current Liability Balance Sheet Credit
Utilities Expense Operating Expense Income Statement Debit
(1) The normal balance for Income Summary will be credit when there is a net income, debit when there is a net loss. The Income
Summary account does not appear on any financial statement.
(2) If a periodic system is used, Inventory also appears on the income statement in the calculation of cost of goods sold.