Which of the following accounts does NOT appear on the balance sheet?

• A. Accounts payable
• B. Prepaid insurance
• C. Service revenue
• D. Accounts receivable

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the purpose of the balance sheet. The balance sheet is a financial statement that reports a company's assets, liabilities, and equity at a specific point in time.
2. Step 2: Identify the types of accounts that appear on the balance sheet. These include assets (e.g., accounts receivable, prepaid insurance), liabilities (e.g., accounts payable), and equity accounts.
3. Step 3: Recognize that revenue accounts, such as service revenue, do not appear on the balance sheet because they are part of the income statement, which reports performance over a period of time.
4. Step 4: Review each account given: Accounts payable (liability), Prepaid insurance (asset), Accounts receivable (asset), and Service revenue (revenue). Only service revenue is not a balance sheet account.
5. Step 5: Conclude that service revenue does NOT appear on the balance sheet, as it is reported on the income statement.