Which of the Following Statements About Revenue and Expense Accounts

question 50

Multiple Choice

Which of the following statements about revenue and expense accounts is correct?

• A)Revenue accounts are a subset of assets,and expense accounts are subcategories of liabilities.
• B)Both revenue accounts and expense accounts are subcategories of assets.
• C)Both revenue accounts and expense accounts are subcategories of Retained Earnings.
• D)Revenue accounts are a subcategory of Cash and expense accounts are a subcategory of Accounts Payable.

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Definitions:

Break-even Sales

The amount of revenue required to cover both the variable and fixed costs of production, resulting in no profit or loss.

Fixed Expenses

Costs that do not vary with the level of production or sales volume, such as rent or salaries.

Segmented Income Statement

An income statement broken down into segments or divisions of a company, allowing for analysis of profitability by segment.

Net Operating Income

The total profit of a business after deducting operating expenses but before subtracting any interest or taxes.