The Balance Sheet of a manufacturing firm will include which account that will NOT be included in the Balance Sheet of a service firm?

A. Cash

B. Accounts Payable

C. Prepaid Insurance

D. Work in Process Inventory

The account that will NOT be included in the Balance Sheet of a service firm is D. Work in Process Inventory. Work in Process Inventory is a type of inventory account that represents partially completed products in the manufacturing process. Since service-based firms do not produce tangible products, they do not have Work in Process Inventory.

To determine which account will not be included in the Balance Sheet of a service firm, we need to understand the difference between a manufacturing firm and a service firm.

A manufacturing firm is involved in the production and sale of tangible goods, while a service firm provides services rather than physical products.

Now, let's analyze each option and see if it would be included in the Balance Sheet of a service firm:

A. Cash: Cash is a current asset and is included on the Balance Sheet of both manufacturing and service firms. It represents the amount of liquidity or ready funds a company has.

B. Accounts Payable: Accounts Payable is a liability account that represents the money owed by a company to its suppliers or creditors for goods or services received. It is included on the Balance Sheets of both manufacturing and service firms as a current liability.

C. Prepaid Insurance: Prepaid Insurance is an asset account that represents the amount paid in advance for insurance coverage. This account is commonly found on the Balance Sheet of both manufacturing and service firms.

D. Work in Process Inventory: Work in Process Inventory is an account that represents the value of partially completed goods in a manufacturing firm. This is the account that will not be included in the Balance Sheet of a service firm because service firms do not have work in process inventory. Service firms do not produce physical goods, so they do not have goods in various stages of completion.

Therefore, the correct answer is D. Work in Process Inventory. It is not included in the Balance Sheet of a service firm.