Fundamentals of Business Intelligence (FBI) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Fundamentals of Business Intelligence Exam. Use flashcards and multiple choice questions with hints and explanations to enhance your study. Gear up for success!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.


Which of the following is classified as an asset on the balance sheet?

  1. Accounts Receivable

  2. Accounts Payable

  3. Shareholder's Equity

  4. Operating Expenses

The correct answer is: Accounts Receivable

Accounts Receivable is classified as an asset on the balance sheet because it represents money that is expected to be received in the future for goods or services that have already been provided to customers. When a business sells its products or services on credit, it creates an obligation for the customer to pay, thus generating a claim that the company has against its customers. This claim is recorded as an asset because it has the potential to generate cash inflow when the customers settle their debts. In contrast, Accounts Payable is a liability; it represents the amount a company owes to suppliers or vendors for purchases made on credit. Shareholder's Equity indicates the owners' residual interest in the assets of the company after deducting liabilities and is not classified as an asset itself. Operating Expenses are costs incurred in the process of running a business and are recorded on the income statement rather than the balance sheet, making them part of the company's cash outflows rather than its assets.