Multiple Choice
In the context of accounting, which of the following best describes the concept of 'investing in yourself'?
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1. Introduction to Accounting
Types of Accounting
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According to standard accounting classifications, a student checking account would be classified as which type of account?
A
Asset account
B
Liability account
C
Equity account
D
Revenue account
Verified step by step guidance1
Understand the nature of a student checking account: It represents money that the student owns and can use, typically held in a bank.
Recall the definition of an asset account: Assets are resources owned by an entity that have economic value and can provide future benefits.
Compare the student checking account to the characteristics of an asset account: Since the account contains funds owned by the student, it fits the definition of an asset.
Review the other classifications: Liability accounts represent obligations, equity accounts represent ownership interest, and revenue accounts represent income earned. None of these apply to a checking account.
Conclude that a student checking account is classified as an asset account because it represents a resource owned by the student.
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