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Account Classifications Quiz
32 Questions
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Account Classifications Quiz

Created by
@NiftyLotus

Questions and Answers

What is the classification and term of a car loan?

  • Shareholders’ Equity - Long-Term
  • Asset - Current
  • Liability - Long-Term (correct)
  • Revenue - Current

    • Which option correctly identifies the classification of software expense?

  • Expense - Current (correct)
  • Revenue - Long-Term
  • Asset - Current
  • Liability - Long-Term

    • How is wages expense classified?

  • Dividend - Long-Term
  • Liability - Current
  • Expense - Current (correct)
  • Asset - Long-Term

    • What classification and term does office furniture belong to?

    <p>Asset - Long-Term</p> Signup and view all the answers

    Which of the following correctly describes long-term investments?

    <p>Asset - Long-Term</p> Signup and view all the answers

    What classification does inventory have?

    <p>Asset - Current</p> Signup and view all the answers

    What classification applies to small tools?

    <p>Asset - Current</p> Signup and view all the answers

    What is the classification and term for accounts payable?

    <p>Liability - Current</p> Signup and view all the answers

    What classification does retained earnings fall under?

    <p>Shareholders’ Equity</p> Signup and view all the answers

    What accounts are classified as current assets?

    <p>Accounts receivable and Cash</p> Signup and view all the answers

    Which of the following is classified as a liability?

    <p>Salaries payable</p> Signup and view all the answers

    What is the classification of repair revenue?

    <p>Revenue</p> Signup and view all the answers

    Which item is considered a long-term asset?

    <p>Telephone equipment</p> Signup and view all the answers

    How is maintenance expense classified?

    <p>Expense</p> Signup and view all the answers

    What does interest expense represent?

    <p>Cost of borrowing money</p> Signup and view all the answers

    Which account represents money owed to the company by customers?

    <p>Accounts receivable</p> Signup and view all the answers

    What is classified as a long-term liability?

    <p>Mortgage payable</p> Signup and view all the answers

    What type of revenue is earned from leasing property or assets?

    <p>Rent revenue</p> Signup and view all the answers

    What classification does cash fall under?

    <p>Current Asset</p> Signup and view all the answers

    What describes subscription revenue?

    <p>Income from subscription services</p> Signup and view all the answers

    Which of the following is an example of an expense?

    <p>Telephone expense</p> Signup and view all the answers

    What type of asset is property classified as?

    <p>Long-Term Asset</p> Signup and view all the answers

    What is the classification of salaries payable?

    <p>Liability - Current</p> Signup and view all the answers

    Which of the following accounts is classified as an expense?

    <p>Salaries Expense</p> Signup and view all the answers

    Which classification best describes cash?

    <p>Asset - Current</p> Signup and view all the answers

    What type of asset is a car classified as?

    <p>Long-Term Asset</p> Signup and view all the answers

    Which of these options describes retained earnings?

    <p>Shareholders’ equity</p> Signup and view all the answers

    What classification does accounts payable fall under?

    <p>Current Liability</p> Signup and view all the answers

    Which of the following is a long-term asset?

    <p>Building</p> Signup and view all the answers

    Which classification does income tax expense belong to?

    <p>Expense</p> Signup and view all the answers

    What type of investments are classified as temporary investments?

    <p>Current Assets</p> Signup and view all the answers

    Which account is classified as an asset?

    <p>Inventory</p> Signup and view all the answers

    Study Notes

    Account Classifications

    • Car Loan

      • Liability classified as Long-Term (LT) due to a repayment period exceeding one year.

    • Software Expense

      • Represents costs incurred from acquiring software, classified as an Expense (Exp) used within the accounting period.

    • Wages Expense

      • Represents labor costs paid to employees, categorized as an Expense (Exp) reflecting operational costs during the period.

    • Office Furniture

      • Asset classified as Long-Term (LT) since it is owned by the company and provides value over many years.

    • Long-term Investments

      • Assets held for generating future returns, classified as Long-Term (LT) due to duration exceeding one year.

    • Inventory

      • Current Asset (C) representing goods held for sale, expected to be sold or used within one year.

    • Small Tools

      • Current Asset (C) used in operations, typically consumed within a year.

    • Accounts Payable

      • Liability categorized as Current (C), representing amounts owed to suppliers, expected to be settled within one year.

    • Retained Earnings

      • Accumulated profits reinvested in the company, classified as Shareholders’ Equity (SE).

    • Accounts Receivable

      • Current Asset (C) indicating money owed to the company by customers, expected to be collected within one year.

    • Property

      • Asset classified as Long-Term (LT), providing economic benefits over many years.

    • Repair Revenue

      • Income from providing repair services, classified as Revenue (Rev), contributing to company earnings.

    • Maintenance Expense

      • Costs incurred to maintain assets, categorized as an Expense (Exp) affecting earnings.

    • Interest Expense

      • Cost of borrowing money, classified as an Expense (Exp) reducing company earnings.

    • Salaries Payable

      • Current Liability (C), representing unpaid salaries owed to employees, expected to be settled within one year.

    • Subscription Revenue

      • Income from subscription services, classified as Revenue (Rev) reflecting increased earnings.

    • Common Shares

      • Ownership interests in the company, classified as Shareholders’ Equity (SE), indicating residual interest after liabilities.

    • Telephone Equipment

      • Long-Term (LT) asset used in operations, expected to provide long-term value.

    • Sales Revenue

      • Income from selling goods or services, categorized as Revenue (Rev) enhancing company earnings.

    • Income Tax Expense

      • Tax liability for the period, considered an Expense (Exp) that reduces overall earnings.

    • Mortgage Payable

      • Long-Term (LT) Liability representing amounts owed on property loans.

    • Cash

      • Most liquid Current Asset (C), readily available for immediate business use.

    • Telephone Expense

      • Cost incurred for telephone services, classified as an Expense (Exp), reducing earnings.

    Additional Account Classifications

    • Temporary Investments

      • Current Asset (C) expected to be converted into cash within one year, signaling liquidity.

    • Consulting Revenue

      • Income from consulting services classified as Revenue (Rev), impacting earnings positively.

    • Rent Revenue

      • Income earned from leasing property classified as Revenue (Rev), increasing company profits.

    • Computer

      • Long-Term (LT) Asset owned by the company, used over multiple years for operations.

    • Utilities Expense

      • Costs associated with utility services, classified as an Expense (Exp), affecting income statements.

    • Land

      • Long-Term (LT) Asset without depreciation, expected to provide indefinite benefits to the company.

    • Building

      • Long-Term (LT) Asset providing economic advantages over an extended period.

    • Bank Loan Payable

      • Long-Term (LT) Liability representing amounts owed to banks, typically requiring long repayment periods.

    • Supplies

      • Current Asset (C) used in operations, consumed within the year reflecting operational efficiency.

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    Description

    Test your knowledge on account classifications including Assets, Liabilities, and more. This quiz focuses on differentiating between current and long-term accounts. Ideal for finance students or professionals wanting to refresh their skills.

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