Class Exercise 1

Identification of Accounting Elements

Sl No. Accounting items Nature Description

1 Building ASSET A Building is a long-term

investment by company
2 Plant ASSET A Plant is long term
investment by company
3 Machinery ASSET A long run fixed asset for a
company
4 Furniture ASSET A long run fixed asset for a
company
5 Equipment ASSET A long run fixed asset for a
company
6 Loan from Bank LIABILITY An obligation for the company
to pay the amount with interest
7 Debentures LIABILITY A debt instrument which is
used by company to raise
money from public
8 Trade receivables ASSET Arises out of credit sales of
goods and services
9 Trade payables LIABILITY Arises out of credit purchases
of goods and services
10 Other receivables INCOME Arises ( for example) out of
sale of asset on credit
11 Other payables EXPENSE Arises ( for example) out of
purchase of asset on credit
12 Sale of goods INCOME Arises out of goods sold
(goods finished in accounting
year)
13 Purchase of goods EXPENSE Goods purchased by the
company
14 Lease rental EXPENSE Arises out of assets taken on
lease
15 Lease rental INCOME Arises out of assets given on
lease
16 Salaries and wages EXPENSE Arises out employing people

17 Power & Fuel EXPENSE It is assumed to be expense for

the company
18 Repairs and EXPENSE It is assumed to be expense for
Maintenance the company
19 Trademarks ASSET It is an intangible asset for the
company
20 Audit fees EXPENSE It is assumed to be expense for
the company