Which of the following accounts would not be considered a reserve account?
A) Allowance of Doubtful Accounts
B) Estimated Warranty Liability
C) Prepaid Expense
D) Accumulated Depreciation

Question

Quizplus · Accepted Answer

Prepaid expense is not considered a reserve account because it represents a payment made in advance for goods or services that will be used in the future. Reserve accounts, on the other hand, are typically set aside to cover potential losses or expenses, such as bad debts, warranties, or depreciation. A, B, and D are all examples of reserve accounts.

Which of the Following Accounts Would Not Be Considered a Reserve