Multiple Choice
Which of the following is a type of accounting primarily concerned with providing information to external users such as investors and creditors?
120
views
1. Introduction to Accounting
Types of Accounting
Multiple Choice
Which of the following is an asset account?
A
Service Revenue
B
Accounts Payable
C
Owner's Capital
D
Accounts Receivable
Verified step by step guidance1
Step 1: Understand the definition of an asset account. An asset account represents resources owned by a business that have future economic value, such as cash, accounts receivable, inventory, or equipment.
Step 2: Review the options provided in the problem. Service Revenue is a revenue account, Accounts Payable is a liability account, and Owner's Capital is an equity account.
Step 3: Identify the correct answer, Accounts Receivable, which is an asset account. It represents money owed to the business by customers for goods or services provided on credit.
Step 4: Confirm that Accounts Receivable fits the definition of an asset account because it is a resource that will provide future economic benefits to the business.
Step 5: Conclude that Accounts Receivable is the correct answer based on its classification as an asset account in financial accounting.
Related Videos
Related Practice
