Which account would be classified as an Asset?

• A. Wages Expense
• B. P. Coyote, Capital
• C. Supplies
• D. Advertising Expense

Answer: (C)

Assets are resources a business controls that are expected to bring future economic benefits. Supplies fits this because it represents on-hand items the company will use in its operations, and these items are recorded as a current asset when purchased. They provide value now by enabling production or servicing, and only become an expense (supplies expense) as they are consumed. Wages expense and Advertising expense reflect costs incurred during the period and are recorded as expenses, not assets. P. Coyote, Capital is an owner’s equity account, representing the owner’s investment rather than an asset. Therefore, supplies is the asset.