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

12. Stockholders' Equity

Retained Earnings

Financial Accounting

12. Stockholders' Equity

Retained Earnings

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Multiple Choice

Which of the following accounts is classified as an owner's equity account?

Accounts Payable

Retained Earnings

Inventory

Prepaid Expenses

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Verified step by step guidance

Understand the concept of owner's equity: Owner's equity represents the residual interest in the assets of the entity after deducting liabilities. It includes accounts such as capital, retained earnings, and other equity accounts.

Analyze each option provided in the problem: Accounts Payable, Inventory, Prepaid Expenses, and Retained Earnings.

Determine the classification of each account: Accounts Payable is a liability account, Inventory is an asset account, Prepaid Expenses is also an asset account, and Retained Earnings is an owner's equity account.

Focus on Retained Earnings: Retained Earnings represent the accumulated profits of the company that have not been distributed to shareholders as dividends. This account is part of owner's equity.

Conclude that Retained Earnings is the correct answer because it is classified as an owner's equity account, while the other options belong to different categories (liabilities or assets).