An Account Linked with Another Account That Has an Opposite

question 143

Multiple Choice

An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n) :

• A) Accrued expense.
• B) Contra account.
• C) Accrued revenue.
• D) Intangible asset.
• E) Adjunct account.

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Definitions:

Nonpayment

The failure to fulfill a financial obligation or to settle a debt within the stipulated time.

Indemnified

Protected against loss or damage; legally exempted from liability for harm or loss.

Liability Insurance

A type of insurance coverage that protects an individual or entity from claims initiated by another party regarding injury or damage.

Representative Capacity

Acting on behalf of another person or entity in a legal or official context.