Which of the following is a true statement?
A)Revenue accounts are a subset of assets,and expense accounts are a subset of liabilities.
B)Both revenue accounts and expense accounts are subsets of contributed capital.
C)Both revenue accounts and expense accounts are subsets of retained earnings.
D)Revenue accounts are a subset of cash,and expense accounts are a subset of accounts payable.

Question

Quizplus · Accepted Answer

Revenue accounts and expense accounts are both subsets of retained earnings, which is a component of shareholders' equity on the balance sheet. Option A, B, and D are incorrect as they do not reflect the proper relationship between revenue and expense accounts and their corresponding financial statement elements.

Which of the Following Is a True Statement