Which is NOT an expense account?AdvertisingRent ExpenseInterest ExpenseAccrued ExpensesRepairs Expenses
Question
Which is NOT an expense account?
- Advertising
- Rent Expense
- Interest Expense
- Accrued Expenses
- Repairs Expenses
Solution
To identify which option is NOT an expense account, we need to understand what constitutes an expense account. Expense accounts are accounts that represent costs incurred by a business during its operations.
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Advertising: This is an expense account, as it represents the costs associated with promoting a product or service.
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Rent Expense: This is also an expense account that reflects the cost of renting property or equipment.
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Interest Expense: This reflects the cost incurred on borrowed funds, making it an expense account.
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Accrued Expenses: This refers to liabilities for services or goods that have been received but not yet paid for, and it is generally categorized as a liability account, not an expense account.
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Repairs Expenses: This is an expense account that represents costs associated with maintaining and repairing assets.
Conclusion
The account that is NOT considered an expense account is Accrued Expenses, as it is classified as a liability.
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