Question

What type of accounts are accounts receivable and inventory?

(a) Cash accounts.
(b) Operating accounts.
(c) Financing accounts.
(d) Investing accounts.

Answer 1

Accounts receivable and inventory are classified as operating accounts, which are vital to a company's daily operations and do not typically pay interest.

Step-by-step explanation:

Accounts receivable and inventory are types of accounts that are classified as operating accounts. These accounts are integral to the day-to-day function of a business. Accounts receivable represent money owed to a company by its customers for products or services that have been delivered but not yet paid for. Inventory, on the other hand, consists of goods and materials that a business holds with the intent to sell. Neither of these accounts is typically associated with paying interest, unlike certain accounts offered to consumers by banks, such as savings accounts or certificates of deposit.