The following general ledger accounts are included in the trial balance for an audit client, Jones Wholesale Stationery Store.
Accounts receivable
Accrued sales salaries
Accumulated amortization of furniture and equipment
Advertising expense
Allowance for doubtful accounts
Amortization expense-furniture and equipment
Bad-debt expense
Bonds payable
Cash
Common stock
Furniture and equipment
Income tax expense
Income tax payable
Insurance expense
Interest expense
Interest income
Interest receivable
Inventory
Notes payable
Notes receivable
Prepaid interest expense
Property tax expense
Property tax payable
Purchases
Rent expense
Retained earnings
Salaries, office and general
Sales
Sales salaries expense
Telephone and fax expense
Travel expense
Unexpired insurance
REQUIRED
a. Identify the accounts in the trial balance that are likely to be included in each transaction cycle. Some accounts will be included in more than one cycle. Use the format that follows.
b. How would the general ledger accounts in the trial balance most likely differ if the company were a retail store rather than a wholesale company? How would they differ for a hospital or a government unit?
Cycle.........................Balance Sheet Accounts..............Income Statement Accounts
Revenue and collections
Acquisition and payment
Human resources and payroll
Inventory and distribution
Capital acquisition and repayment