Accounting Fundamentals Certification (AFC) Practice Test

Question: 1 / 400

What type of account is Fees Earned classified as?

Asset Account

Liability Account

Revenue Account

Fees Earned is classified as a revenue account because it represents the income generated from providing services or selling goods to customers. Revenue accounts track the inflow of economic benefits resulting from the company's operating activities, which is critical for assessing the financial performance of a business.

In accounting, revenues are recorded when they are earned, regardless of when the cash is received, following the accrual basis of accounting. Fees Earned specifically reflects the sales or services that a company has completed, and thus it contributes directly to the company’s profitability. Understanding that this account impacts the income statement helps clarify its role in overall financial reporting, providing a clear view of the company’s operational success within a specific period.

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Expense Account

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