Which is not an expense account indeed ?a)Repairs expense b)Rent expense c)Accrued expenses d)Advertising expense e)Interest expense

Real Tutor Solution

Tutor-Verified Answer

Quick Answer

c) Accrued expenses

Step-by-step Solution

1. Expense accounts are used to track costs incurred by a business in its operations.
2. Repairs expense, Rent expense, Advertising expense, and Interest expense are all specific types of expense accounts that record the costs related to repairs, rent, advertising, and interest, respectively.
3. Accrued expenses are not a specific type of expense account but rather a liability account that represents expenses that have been incurred but not yet paid.

Supplemental Knowledge:

Accounting accounts known as expense accounts allow businesses to keep track of costs associated with running operations, providing crucial data in calculating net income as revenue is subtracted to determine profit or loss. Examples of expense accounts could include salaries, rent payments, utility costs or advertising spending.

Real-World Applications:

Imagine running a small business. Your expenses might include rent for office space and advertising costs to market products; repairs for equipment that breaks down; as well as categorizing these costs effectively for easy financial management. Categorizing expenses helps understand where money is flowing while managing finances effectively.

For example, if your advertising expenses are yielding positive returns in terms of increased sales, allocating more budget for marketing could be wise. Conversely, if repair costs continue to escalate rapidly it could be time for investment in more reliable equipment.

For more insights into financial accounting concepts like this one, explore UpStudy’s live tutor question bank! It’s an excellent resource for enhancing your understanding through personalized learning experiences tailored to your needs.

Reviewed and approved by the UpStudy tutoring team