Classification Of Accounts Quiz: Exam!

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| By Cathy Bardy
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Cathy Bardy
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Quizzes Created: 2 | Total Attempts: 3,460
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  • 1/20 Questions

    Computer

    • Asset
    • Liability
    • Owner's Equity
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About This Quiz


Do you know how to classify accounts? Accounts classified as asset accounts, liability accounts, capital, or owner’s equity accounts, withdraw accounts, revenue or income accounts and express accounts. The five major accounts correlate to each other. If one changes, the other will change too. The way these accounts are classified is somewhat new. This quiz will tell you about the classification of accounts. Don’t forget to take your certificate upon conclusion of the quiz.

Classification Of Accounts Quiz: Exam! - Quiz

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  • 2. 

    Office Furniture

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    Office furniture is considered an asset because it is a tangible item that holds value and can be used to generate income for a business. It is a long-term investment that provides utility and contributes to the overall productivity and functionality of the office space. Additionally, office furniture can be depreciated over time, which further supports its classification as an asset on the balance sheet.

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  • 3. 

    Truck

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    A truck is considered an asset because it is a valuable resource owned by a business or individual that can generate economic benefits in the future. Assets are items of value that a company or individual owns and can use to generate income or provide services. In this case, the truck can be used for transportation or delivery purposes, which can contribute to the profitability of the business or individual.

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  • 4. 

    Land

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    Land is classified as an asset because it represents a valuable resource that a company or individual owns. It has economic value and can be used to generate income or provide a benefit in the future. As an asset, land is recorded on the balance sheet and its value is typically reported at its historical cost. It is important to note that land is a non-depreciable asset, meaning its value does not decrease over time. Instead, it may appreciate in value, making it a valuable asset for the owner.

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  • 5. 

    Display Equipment

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    The given correct answer is "Asset". In accounting, assets are resources owned by a company that have future economic value. Display equipment is a tangible asset that a company owns and uses in its operations. It is classified as an asset because it provides a benefit to the company and can generate revenue in the future.

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  • 6. 

    Mortgage Payable

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Liability
    Explanation
    The correct answer is Liability because a mortgage payable represents a debt that the company owes to a lender. It is a liability because the company has an obligation to make regular payments on the mortgage until it is fully paid off. This debt is not considered an asset because it does not provide any future economic benefits to the company. It is also not considered owner's equity because it does not represent the owner's investment in the business.

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  • 7. 

    Calculator Supplies

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    The given correct answer is "Asset". In accounting, assets are resources with economic value that an individual or business owns or controls. They can be tangible, such as cash, inventory, or property, or intangible, such as patents or trademarks. In the context of calculator supplies, these would typically be considered as assets because they are items that have value and are owned by the individual or business.

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  • 8. 

    Texas Payable

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Liability
    Explanation
    The term "Texas Payable" suggests that it is a liability. Payable refers to an amount that is owed or payable to someone. Therefore, Texas Payable is most likely a liability for the company.

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  • 9. 

    Accounts Payable

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Liability
    Explanation
    Liability refers to the financial obligations or debts that a company owes to external parties. Accounts Payable is a type of liability that represents the amount of money a company owes to its suppliers or vendors for goods or services received but not yet paid for. It is recorded on the balance sheet under the liability section as it represents the company's obligation to settle these payables in the future. Therefore, the correct answer is liability.

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  • 10. 

    Cash

    • Asset

    • Liability

    • Owner's Equity

    • Answer option 4

    Correct Answer
    A. Asset
    Explanation
    Cash is considered an asset because it represents the value of money that a person or business owns and can use to make purchases or pay off debts. As an asset, it is recorded on the balance sheet of a company and is typically categorized under current assets. Cash is an important component of a company's financial health and is used to measure liquidity and solvency.

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  • 11. 

    Calculator Equipment

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    The given correct answer is "Asset" because a calculator equipment is considered as an asset. Assets are resources or properties that a company owns, which have value and can be used to generate future economic benefits. Since a calculator equipment is a tangible item that holds value and can be utilized in business operations, it falls under the category of assets on a company's balance sheet.

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  • 12. 

    Notes Payable

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Liability
    Explanation
    The correct answer is liability because notes payable refers to the amount of money that a company owes to creditors or lenders. It represents a legal obligation to repay a loan or debt, which falls under the category of liabilities on the balance sheet. Liabilities represent the company's obligations or debts that need to be settled in the future, and notes payable is one such obligation.

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  • 13. 

    Business Analyst  Payable

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Liability
    Explanation
    Liability refers to the financial obligations or debts that a business owes to external parties. It represents the claims of creditors on the business's assets and is recorded on the balance sheet. Examples of liabilities include loans, accounts payable, and accrued expenses. In the given options, "Business Analyst Payable" does not make sense, and "Asset" and "Owner's Equity" are not related to the concept of liability. Therefore, the correct answer is "Liability."

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  • 14. 

    Buildings

    • Liability

    • Asset

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    Buildings are considered as assets because they have economic value and can generate future benefits for the owner. Assets are resources owned by a company or individual that have monetary value and are expected to provide future economic benefits. Buildings can be bought, sold, or rented out, making them valuable assets that contribute to the owner's wealth.

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  • 15. 

    Office Supplies

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    Office supplies are considered an asset because they have monetary value and can be used to generate income for a business. They are tangible items that are owned by the company and are expected to provide future economic benefits. Office supplies are typically used in day-to-day operations and are necessary for the smooth functioning of the business. Therefore, they are classified as an asset on the balance sheet.

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  • 16. 

    Jones Payable

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Liability
    Explanation
    Jones Payable is classified as a liability because it represents an amount owed by Jones to another party. In accounting, liabilities are obligations or debts that a company owes to external parties. Since Jones Payable represents an amount owed by Jones, it falls under the category of liabilities.

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  • 17. 

    Accounts Receivable

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    Accounts Receivable refers to the amount of money owed to a company by its customers for goods or services that have been delivered but not yet paid for. As an asset, it represents the company's right to receive payment in the future. This is because the company can convert the accounts receivable into cash when the customers make their payments. Therefore, it is considered an asset on the company's balance sheet.

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  • 18. 

    Prepaid Insurance

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    Prepaid insurance is classified as an asset because it represents an amount paid in advance for insurance coverage that will benefit the company in the future. It is considered an asset because it has future economic value and can be used to offset future expenses. Prepaid insurance is typically recorded on the balance sheet as a current asset and is gradually expensed over the period it covers.

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  • 19. 

    David Hughes, Capital

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Owner's Equity
    Explanation
    The answer "Owner's Equity" refers to the portion of a company's assets that belongs to the owners or shareholders. It represents the residual interest in the assets of the company after deducting liabilities. In other words, it is the net worth of the company, calculated by subtracting liabilities from assets. Owner's Equity is an important financial metric as it indicates the value of the company to its owners and represents their claims on the company's assets.

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  • 20. 

    Prepaid Rent

    • Asset

    • Liability

    • Owner's Equity

    Correct Answer
    A. Asset
    Explanation
    Prepaid rent is considered an asset because it represents a payment made in advance for the use of a property or space. It is an amount that has been paid but has not yet been used or consumed. As such, it has future economic benefits for the company and can be recorded as an asset on the balance sheet.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 18, 2018
    Quiz Created by
    Cathy Bardy
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