Multiple Choice
Which of the following is an example of an expense account?
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1. Introduction to Accounting
Types of Accounting
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Which of the following is a financial resource that flows out of an organization?
A
Revenue
B
Asset
C
Equity
D
Expense
Verified step by step guidance1
Understand the concept of financial resources flowing out of an organization. These are typically costs or expenditures incurred during operations, which reduce the organization's financial position.
Review the definitions of the options provided: Revenue refers to income generated from business activities, Assets are resources owned by the organization, Equity represents the owner's claim on the assets, and Expense refers to costs incurred to generate revenue.
Identify that an expense is a financial resource that flows out of an organization because it represents the consumption or use of resources to operate the business.
Recognize that expenses are recorded on the income statement and reduce the net income of the organization.
Conclude that the correct answer is 'Expense' because it directly represents the outflow of financial resources from the organization.
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