Classify Each of the Following Accounts as to Whether They

question 77

Essay

Classify each of the following accounts as to whether they would appear on a balance sheet (BS) or income statement (IS).
___Accounts Payable
___Accounts Receivable
___Accumulated Depreciation, Equipment
___Advertising Expense
___Cash
___Depreciation Expense, Equipment
___Equipment
___Income from Tours
___Insurance Expense
___Owner, Capital
___Frepaid Insurance
___Rent Expense
___Supplies
___Utilities Expense
___Wages Expense
___Wages Payable

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Definitions:

Pin Factory

Illustration by Adam Smith in "The Wealth of Nations" on how division of labor increases productivity, using a pin factory as an example.

Diminishing Returns

The principle stating that if one factor of production is increased while others remain constant, the overall returns will initially increase but there will come a point where the added benefits will start to decrease.

Increasing Returns

An increase in firm’s output by a larger percentage than the percentage increase in its inputs.

MC

Marginal Cost, the change in total production cost that comes from making or producing one additional unit.