Accounting Fundamentals Certification (AFC) Practice Test 2026 – The Comprehensive All-in-One Guide to Exam Success!

Question: 1 / 400

Which of the following is not classified as an Asset?

Cash

Prepaid Insurance

Wages Payable

Wages Payable is not classified as an asset because it represents a liability for the company. Liabilities are obligations that a business owes to creditors or other parties, which must be settled in the future, usually through the payment of money or provision of goods or services. In this case, wages payable refers to the amount a company owes to its employees for work performed but not yet paid.

In contrast, cash, prepaid insurance, and equipment are all considered assets. Cash is a liquid asset that can be used to settle obligations or buy goods and services. Prepaid insurance is an asset as well because it represents a payment made in advance for future benefits, such as insurance coverage that is available for future periods. Equipment is a tangible asset that can be utilized in business operations and has economic value.

Get further explanation with Examzify DeepDiveBeta

Equipment

Next Question

Report this question

Download Accounting Fundamentals Certification (AFC) Practice Test PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy