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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

A common example of an asset is

  1. (a) Professional Fees.
  2. (b) Rent Expense.
  3. (c) Accounts Receivable.
  4. (d) Accounts Payable.

To determine

Identify a common example of an asset.

Explanation

Justification for the incorrect answer:

Option (a) is incorrect because professional fees are a revenue account. Hence, it is an example of revenue not an asset.

Option (b) is incorrect because rent expense is an expense account. Hence, it is an example of expense not an asset.

Option (d) is incorrect because accounts payable is an liability account. Hence, it is an example of liability not an asset.

Justification for the correct answer:

Option (c)

Asset

An asset is a resource in tangible or intangible form that has economic value and can be owned or held by the company to generate future benefits...

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