Multiple Choice
Which of the following is a type of accounting primarily concerned with providing information to external users such as investors and creditors?
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1. Introduction to Accounting
Types of Accounting
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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.
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