State BPA Fundamental Accounting Practice Exam

If an account starts with a value of 4, what type of account is it likely to be?

1. Expense account

2. Asset account

3. Liability account

4. Revenue account

The correct answer is: Revenue account

When evaluating what type of account is indicated by starting with a value of 4, it is important to consider the typical characteristics of different account types. An account that begins with a positive value usually corresponds to an account that increases in a positive manner when transactions occur that add value. If we specifically consider the context of accounting, assets typically represent items of value owned by the company, liabilities embody obligations or debts, expenses relate to costs incurred in generating revenue, and revenue represents income received from operations. Starting with a positive value often signifies an initial income or gains resulting from transactions rather than costs or obligations. In this scenario, a value of 4 suggests it is likely reflecting income generated, thus indicating that it is a revenue account. Revenue accounts increase with sales or income generated, contributing positively to the overall financial position of the company and allowing for a positive initial entry. This understanding highlights why the answer pointing to a revenue account is appropriate based on the information provided.