Which of the following statements regarding account classification is true?
A)Assets and revenues are the same thing
B)If employees have not yet been paid for their work,the company has wages payable
C)Retained earnings equal cash which the company has earned and kept
D)Revenue is another term for profit
E)Revenue minus expense equals retained earnings

Question

Quizplus · Accepted Answer

The statement "If employees have not yet been paid for their work, the company has wages payable" is true. Wages payable is a liability account that represents the amount owed by the company to its employees for work that has been performed but not yet paid for. Assets and revenues are not the same thing (A). Retained earnings do not necessarily equal cash (C) and revenue is not another term for profit (D). While revenue minus expense does affect retained earnings, it does not equal retained earnings (E).

Which of the Following Statements Regarding Account Classification Is True