Multiple Choice
Which general ledger accounts are listed in the trial balance columns of a worksheet?
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2. Transaction Analysis
Trial Balance
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Which of the following best describes 'money in savings which can pay expenses when income may not be accumulating' in the context of a trial balance?
A
Prepaid expenses
B
Unearned revenue
C
Reserve fund
D
Accounts receivable
Verified step by step guidance1
Understand the context of the term 'money in savings which can pay expenses when income may not be accumulating.' This refers to funds set aside to cover expenses during periods of low or no income.
Review the options provided: Prepaid expenses, Unearned revenue, Reserve fund, and Accounts receivable. Each term has a specific meaning in financial accounting.
Prepaid expenses refer to payments made in advance for goods or services to be received in the future. This does not match the description of savings for covering expenses during low income periods.
Unearned revenue refers to money received by a business for services or goods that have not yet been delivered. This is a liability and does not align with the concept of savings for expenses.
Reserve fund is a term used to describe money set aside for future use, particularly to cover unexpected expenses or periods of low income. This matches the description provided in the problem.
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