Which of the Following Accounts Would Not Be Considered a Reserve

question 20

Multiple Choice

Which of the following accounts would not be considered a reserve account?

• A) Allowance for Doubtful Accounts
• B) Estimated Warranty Liability
• C) Prepaid Expense
• D) Accumulated Depreciation

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Definitions:

Property Damage Liability

A component of auto insurance that covers damage you, as the driver, might cause to another person's property.

Underinsured Driver

A motorist who has insurance coverage, but not enough to cover the full costs of a claim from an accident.

Depreciation Rate

The rate at which an asset loses its value over time, often used for accounting and tax purposes.

ABS

Stands for Anti-lock Braking System, a safety feature in vehicles that prevents the wheels from locking up during braking, ensuring the driver maintains steering control.