Match the account type to its category: Land | Income VAT owing | Equity Drawings | Liability Sales | Asset
Understand the Problem
The question asks for categorization of different account types into their respective categories. Specifically, it requires matching each account type (Land, VAT owing, Drawings, Sales) with the appropriate category (Income, Equity, Liability, Asset).
Answer
Land: Asset, Income VAT owing: Liability, Equity Drawings: Equity, Sales: Revenue.
Land - Asset, Income VAT owing - Liability, Equity Drawings - Equity, Sales - Revenue.
Answer for screen readers
Land - Asset, Income VAT owing - Liability, Equity Drawings - Equity, Sales - Revenue.
More Information
These categories are fundamental in accounting and help organize financial statements. 'Land' falls under 'Assets' because it is a resource owned by the entity. 'Income VAT owing' is a 'Liability' since the company owes this amount. 'Equity Drawings' reduce owner's equity, and 'Sales' are considered 'Revenue'.
Tips
A common mistake is confusing 'Liabilities' with 'Assets'. Remember, assets are owned, while liabilities are owed.
Sources
- Chart of accounts - Wikipedia - en.wikipedia.org
- Types of Accounts in Accounting | Assets, Expenses, & More - patriotsoftware.com
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