Multiple choice

Which of the following answers properly classifies these commonly used accounts?(1 ) Building (2) Machinery (3) Credit purchases (4) Drawings (5) Rent paid (6) Interest earned (7) Prepaid insurance charges (8)Discount allowed (9) Fresh capital introduced (10) Outstanding electricity charges

ASSETS LIABILITIES REVENUE EXPENSES CAPITAL (a) 5,4 3 8,7 1, 9 2,6,10 (b) 1,3,9 2,7 4,8 5 6,10 (c) 1,2,7 3,10 6 5,8 4,9 (d) 3,9 1,4,7 2 5,8 6,10

  1. (a)

  2. (b)

  3. (c)

  4. (d)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Building, machinery, and prepaid insurance are assets. Credit purchases and outstanding charges are liabilities. Interest earned is revenue, rent and discounts are expenses, and drawings and fresh capital relate to the capital account. Option C correctly groups these items.

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