Multiple Choice
From the lists of accounts below, which one contains only revenue accounts?
9
views
1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is NOT considered an asset in financial accounting?
A
Cash
B
Accounts Payable
C
Inventory
D
Prepaid Expenses
Verified step by step guidance1
Understand the definition of an asset: In financial accounting, an asset is a resource owned or controlled by a company that is expected to provide future economic benefits.
Review the options provided: Cash, Accounts Payable, Inventory, and Prepaid Expenses.
Analyze each option: Cash is an asset because it is a resource owned by the company. Inventory is an asset because it represents goods available for sale, which will generate future economic benefits. Prepaid Expenses are considered assets because they represent payments made in advance for services or goods that will benefit the company in the future.
Identify the exception: Accounts Payable is not an asset. It is a liability, which represents amounts owed by the company to creditors for goods or services received but not yet paid for.
Conclude that the correct answer is Accounts Payable, as it does not meet the definition of an asset in financial accounting.
4:10mWatch next
Master Types of Accounting: Financial and Managerial with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Types of Accounting practice set
Problem sets built by lead tutorsExpert video explanations