Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which one of the following can be depreciated by an investor?

A bank loan

A building owned and used for rental purposes

Accounts payable

Unearned revenue

Previous problemNext problem

Verified step by step guidance

Understand the concept of depreciation: Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It applies to physical assets that are used in business operations and lose value over time due to wear and tear, obsolescence, or usage.

Identify the types of items listed in the problem: A bank loan, accounts payable, and unearned revenue are financial liabilities or obligations, not tangible assets. These cannot be depreciated because they do not have a physical form or a useful life.

Focus on the building owned and used for rental purposes: A building is a tangible asset, and if it is used for rental purposes, it qualifies as a business asset. Such assets are subject to depreciation because they have a finite useful life and lose value over time.

Determine the conditions for depreciation: For an asset to be depreciated, it must be owned by the investor, used in business operations (e.g., rental purposes), and have a determinable useful life. The building meets all these criteria.

Conclude that the building owned and used for rental purposes is the correct answer: It is the only item in the list that qualifies as a depreciable asset under financial accounting principles.