Each of the following items is shown in the financial statements of Exxon Mobil Corporation.
1. Accounts payable
2. Cash equivalents
3. Crude oil inventory
4. Equipment
5. Exploration expenses
6. Income taxes payable
7. Investments
8. Long-term debt
9. Marketable securities
10. Notes and loans payable
11. Notes receivable
12. Operating expenses
13. Prepaid taxes
14. Sales
15. Selling expenses
a. Identify the financial statement (balance sheet or income statement) in which each item would appear.
b. Can an item appear on more than one financial statement?
c. Is the accounting equation relevant for ExxonMobil Corporation?
Answer:
a.
Balance sheet: 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 13
Income statement: 5, 12, 14, 15
b. Yes, an item can appear on more than one financial statement. For example, cash appears on both the balance sheet and statement of cash flows. However, the same item cannot appear on both the income statement and balance sheet.
c. Yes, the accounting equation is relevant to all companies, including Exxon Mobil Corporation.