Which item is an asset?

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Multiple Choice

Which item is an asset?

Explanation:
Cash in the bank is an asset because it represents resources the entity owns that will bring future economic benefits, such as the ability to pay expenses or invest. It’s the most liquid form of asset, readily available for use. The other items are obligations the entity owes to others, so they’re liabilities: wages payable are wages the company owes to employees, mortgage payable is the loan principal the company must repay, and debt payable to a lender is an outstanding loan. So, among the options, cash in the bank fits the definition of an asset.

Cash in the bank is an asset because it represents resources the entity owns that will bring future economic benefits, such as the ability to pay expenses or invest. It’s the most liquid form of asset, readily available for use. The other items are obligations the entity owes to others, so they’re liabilities: wages payable are wages the company owes to employees, mortgage payable is the loan principal the company must repay, and debt payable to a lender is an outstanding loan. So, among the options, cash in the bank fits the definition of an asset.

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