Questions and Answers
What type of asset is represented by cash?
What does prepaid rent represent?
asset
What type of account are office supplies classified as?
asset
What does prepaid insurance represent?
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What type of account is commonly associated with office equipment?
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What is common stock considered?
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What type of account is accounts payable?
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What type of account is unearned revenue?
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What type of account are dividends classified as?
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What is advertising expense categorized as?
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What type of account does rent revenue belong to?
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What does rent receivable indicate?
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What category do patents fall under?
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What type of account is rent payable?
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What type of account does furniture belong to?
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What type of account is notes payable?
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What type of account is common stock classified as?
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What is utilities expense categorized as?
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What does fees earned represent?
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What type of account is office supplies classified as?
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What type of account are dividends classified as?
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What is wages expense classified as?
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What type of account is accounts receivable?
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What does prepaid rent represent?
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What type of account is wages payable?
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What is building considered?
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What type of account is common stock considered?
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What does increasing land represent?
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What does increasing common stock indicate?
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What does increasing fees earned indicate?
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What does increasing office expenses represent?
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What does increasing equipment indicate?
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What does increasing notes payable indicate?
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Common stock and dividends are examples of what?
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Accounts payable, unearned revenue, and notes payable are examples of what?
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Accounts receivable, prepaid accounts, supplies, and land are examples of what?
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An _______ is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.
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What does the company provided $$ of services on credit represent?
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Study Notes
Asset Accounts
- Cash is categorized as a current asset and represents liquid funds available.
- Prepaid rent is an asset, recorded when payment is made before the benefit is received.
- Office supplies count as assets as they are consumable goods held for use.
- Prepaid insurance is recognized as an asset until the insurance coverage period begins.
- Office equipment is classified as an asset used for conducting business operations.
- Rent receivable is an asset reflecting amounts due from tenants for rented properties.
- Patents signify valuable intellectual property and are recorded as assets.
- Furniture is considered a fixed asset used for business purposes.
Equity Accounts
- Common stock represents ownership in a corporation and is classified as equity.
- Dividends are distributions of a portion of a company's earnings to its shareholders and are part of equity.
Liability Accounts
- Accounts payable indicate amounts a company owes to suppliers and are classified as liabilities.
- Unearned revenue is a liability representing cash received before services are delivered.
- Rent payable signifies obligations to pay rent and is categorized as a liability.
- Notes payable are formal written promises to pay debts and are classified as liabilities.
- Wages payable reflect amounts owed to employees for work performed and are recorded as liabilities.
Expense Accounts
- Advertising expense denotes costs incurred for promotional activities and is classified as an expense.
- Utilities expense refers to costs related to public services and is classified as an expense.
- Wages expense reflects the total compensation for employees during a period and is also categorized as an expense.
Revenue Accounts
- Rent revenue accounts for income received from leasing property.
- Fees earned are recorded as revenue when services are provided; often recognized as a credit.
Accounting Transactions
- Accounts are records of financial transactions that track increases and decreases in assets, liabilities, equity, revenue, or expense items.
- Increases in assets or expenses are recorded as debits, while increases in liabilities, equity, or revenue are recorded as credits.
- Specific actions like increasing land, office supplies, common stock, or expenses reflect debits, while increasing notes payable or fees earned reflects credits.
Additional Notes
- Accounts receivable reflects amounts due to a business, often linked with credit services provided.
- Common stock and dividends exemplify components of equity accounts, showcasing a company’s capital structure.
- Accounts payable, unearned revenue, and notes payable highlight typical types of liabilities businesses might encounter.
- Important categories of assets include accounts receivable, prepaid accounts, supplies, and land, which provide a financial snapshot of resources owed.
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Description
Test your knowledge on asset, equity, and liability accounts in accounting. This quiz covers various categories, including current assets like cash and prepaid items, as well as essentials of equity and liability classifications. Brush up your understanding of these fundamental concepts in accounting!
