Identify the Account Below That Is Classified as an Asset

question 151

Multiple Choice

Identify the account below that is classified as an asset in a company's chart of accounts:

• A)Accounts Receivable
• B)Accounts Payable
• C)Common Stock
• D)Unearned Revenue
• E)Service Revenue

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Definitions:

Percent of Sales Method

A financial forecasting model that estimates future elements of a financial statement as a percentage of sales.

Percent of Receivables Method

This is an accounting method used to estimate the amount of a company's receivables that will not be collected, based on a percentage of total receivables.

Bad Debt Expense

Bad debt expense is an estimated expense that a company records to cover receivables that are unlikely to be collected, acknowledging these credits as losses.

Accounts Receivable Turnover Ratio

A financial metric that measures how efficiently a company collects revenue from its customers by comparing net credit sales to average accounts receivable.