Which item would be reported as an asset on the balance sheet?

Which item would be reported as an asset on the balance sheet?

• A. Equipment
• B. Accounts Payable
• C. Service Revenue
• D. Interest Revenue

Answer: (A)

Assets are resources owned or controlled by a business that are expected to bring future economic benefits. Equipment is a tangible resource used in operations and is recorded on the balance sheet as a long-term asset (often called a fixed asset) at its cost and then depreciated over time. This contrasts with accounts payable, which is a liability representing amounts owed to others, and service revenue and interest revenue, which are income statement items that increase net income and equity but are not reported as assets on the balance sheet. Therefore equipment sits on the balance sheet as an asset.

Assets are resources owned or controlled by a business that are expected to bring future economic benefits. Equipment is a tangible resource used in operations and is recorded on the balance sheet as a long-term asset (often called a fixed asset) at its cost and then depreciated over time. This contrasts with accounts payable, which is a liability representing amounts owed to others, and service revenue and interest revenue, which are income statement items that increase net income and equity but are not reported as assets on the balance sheet. Therefore equipment sits on the balance sheet as an asset.