QQuestionAccounting
QuestionAccounting
Which of the following is NOT a temporary account?
Revenue
Equity
Expense
Drawings
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Answer
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Step 1:: Understand the question
The question asks us to identify the account type that is NOT a temporary account. Temporary accounts are used to record business transactions that only affect a company's financial position in the short term. These accounts include Revenue, Expenses, and Drawings.
Step 2:: Review the account types
- Revenue: This type of account records income earned by a business from its operations. Examples include sales, service fees, and interest income. - Equity: Equity accounts represent ownership in a company. These accounts include common stock, preferred stock, and retained earnings. - Expenses: Expense accounts record the costs incurred by a business in generating revenue. Examples include salaries, rent, and utilities. - Drawings: This type of account tracks the withdrawal of assets from a business by its owners.
Step 3:: Identify the account type that is NOT a temporary account
Among the given account types, Equity is the account that is NOT a temporary account. Equity accounts represent ownership in a company and are considered permanent accounts. They appear on the balance sheet and do not reset to zero at the end of an accounting period.
Final Answer
Equity is the account type that is NOT a temporary account.
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