1. Which of the following accounts would typically be listed under the
"Revenue" section of the Chart of Accounts?
A. Interest Expense
B. Cost of Goods Sold
C. Service Revenue
D. Accounts Receivable
Answer: C) Service Revenue
Rationale: Service Revenue is classified as a revenue account because it
represents the income generated from providing services.
2. Which of the following is an example of a liability account?
A. Accumulated Depreciation
B. Sales Revenue
C. Accounts Receivable
D. Mortgage Payable
Answer: D) Mortgage Payable
Rationale: Mortgage Payable is a liability account because it represents
an amount owed by the company to the bank or lender for a mortgage
loan.
3. Which of the following account types will increase with a debit?
,A. Liability
B. Equity
C. Asset
D. Revenue
Answer: C) Asset
Rationale: Assets increase with a debit entry, while liabilities and equity
typically increase with a credit entry.
4. How is a “Prepaid Expense” classified in the Chart of Accounts?
A. Liability
B. Expense
C. Asset
D. Equity
Answer: C) Asset
Rationale: Prepaid Expenses are classified as assets because they
represent amounts paid in advance for goods or services that will be
consumed in the future.
5. What is the classification of "Common Stock" in the Chart of
Accounts?
A. Liability
B. Asset
C. Equity
, D. Revenue
Answer: C) Equity
Rationale: Common Stock is classified as equity because it represents
the ownership interest in a company.
6. What is the classification for “Inventory” in the Chart of Accounts?
A. Asset
B. Liability
C. Equity
D. Revenue
Answer: A) Asset
Rationale: Inventory is classified as a current asset because it
represents goods intended for sale or used in the production process.
7. Which of the following accounts is classified as a "current liability"?
A. Bonds Payable
B. Long-term Lease Obligation
C. Accounts Payable
D. Common Stock
Answer: C) Accounts Payable
Rationale: Accounts Payable is classified as a current liability because it
represents amounts the company owes to vendors and is expected to be
paid within one year.
"Revenue" section of the Chart of Accounts?
A. Interest Expense
B. Cost of Goods Sold
C. Service Revenue
D. Accounts Receivable
Answer: C) Service Revenue
Rationale: Service Revenue is classified as a revenue account because it
represents the income generated from providing services.
2. Which of the following is an example of a liability account?
A. Accumulated Depreciation
B. Sales Revenue
C. Accounts Receivable
D. Mortgage Payable
Answer: D) Mortgage Payable
Rationale: Mortgage Payable is a liability account because it represents
an amount owed by the company to the bank or lender for a mortgage
loan.
3. Which of the following account types will increase with a debit?
,A. Liability
B. Equity
C. Asset
D. Revenue
Answer: C) Asset
Rationale: Assets increase with a debit entry, while liabilities and equity
typically increase with a credit entry.
4. How is a “Prepaid Expense” classified in the Chart of Accounts?
A. Liability
B. Expense
C. Asset
D. Equity
Answer: C) Asset
Rationale: Prepaid Expenses are classified as assets because they
represent amounts paid in advance for goods or services that will be
consumed in the future.
5. What is the classification of "Common Stock" in the Chart of
Accounts?
A. Liability
B. Asset
C. Equity
, D. Revenue
Answer: C) Equity
Rationale: Common Stock is classified as equity because it represents
the ownership interest in a company.
6. What is the classification for “Inventory” in the Chart of Accounts?
A. Asset
B. Liability
C. Equity
D. Revenue
Answer: A) Asset
Rationale: Inventory is classified as a current asset because it
represents goods intended for sale or used in the production process.
7. Which of the following accounts is classified as a "current liability"?
A. Bonds Payable
B. Long-term Lease Obligation
C. Accounts Payable
D. Common Stock
Answer: C) Accounts Payable
Rationale: Accounts Payable is classified as a current liability because it
represents amounts the company owes to vendors and is expected to be
paid within one year.
