Podcast
Questions and Answers
Which type of account represents the goods that are held for sale by a business?
Which type of account represents the goods that are held for sale by a business?
- Inventory (correct)
- Cash
- Accounts receivable
- Allowance for bad debts
What is the term used to describe receivables supported by oral or informal promises to pay?
What is the term used to describe receivables supported by oral or informal promises to pay?
- Allowance for bad debts
- Cash
- Accounts receivable (correct)
- Notes receivables
What is the term used to describe the aggregate of estimated losses from uncollectible accounts receivable?
What is the term used to describe the aggregate of estimated losses from uncollectible accounts receivable?
- Accounts receivable
- Allowance for bad debts (correct)
- Notes receivables
- Cash
Which account includes money or its equivalent that is readily available for unrestricted use?
Which account includes money or its equivalent that is readily available for unrestricted use?
What are receivables supported by written or formal promises to pay in the form of promissory notes called?
What are receivables supported by written or formal promises to pay in the form of promissory notes called?
Which account represents the cost of unused office and other supplies?
Which account represents the cost of unused office and other supplies?
What is the term used to describe rent that is paid in advance?
What is the term used to describe rent that is paid in advance?
Which asset is not subject to depreciation?
Which asset is not subject to depreciation?
Study Notes
Accounts and Receivables
- Inventory represents goods held for sale by a business, crucial for assessing available stock.
- Informal receivables are termed "oral promises," showcasing agreements made without formal documentation.
- Estimated losses from uncollectible accounts receivable are referred to as "allowance for doubtful accounts," affecting financial forecasts and reporting.
Cash and Supplies
- Cash includes money or equivalents that are readily available for unrestricted use, essential for day-to-day operations.
- Office supplies that are not fully utilized are recorded in a "supplies expense" account, representing cost efficiency in resource management.
Rent and Assets
- Prepaid rent is the term for rent paid in advance, affecting cash flow and future expense recognition.
- Land is an asset not subject to depreciation, maintaining its value over time and essential in real estate accounting.
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Description
Test your knowledge on the different types of major accounts in accounting! This quiz will cover common account titles for assets, liabilities, equity, income, and expenses. Challenge yourself to correctly identify the various account types and enhance your understanding of accounting terminology.
