Accounts That Are Used to Describe Assets, Liabilities, and Equity

question 124

Multiple Choice

Accounts that are used to describe assets, liabilities, and equity, that are not closed as long as the company continues to own the assets, owe the liabilities, or have equity, and whose balances appear on the balance sheet are called

• A) Summary accounts
• B) Temporary accounts
• C) Permanent accounts
• D) Contra accounts.
• E) Accrued accounts

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Definitions:

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, recognizing it as an expense over time in financial statements.

Auto Property Taxes

Taxes levied on vehicles by local governments, calculated based on the value of the vehicle.

Cost Recovery Deduction

A method for businesses to deduct the costs of certain properties over time, often used for depreciation and amortization of assets.

Expense Deduction

Tax deductions that allow individuals or businesses to subtract certain expenses from their taxable income, thereby reducing their tax liability.