Future Business Leaders of America (FBLA) Accounting Practice Test

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Prepare for the FBLA Accounting Test with practice quizzes and comprehensive questions. Each question is designed to help deepen your understanding and enhance your readiness for the exam. Are you ready to excel?

Practice this question and more.

Which type of financial event does not contribute to income but rather indicates personal use of business assets?

Revenue
Expense
Withdrawals
Sales

The correct answer is: Withdrawals

The correct answer highlights withdrawals, which specifically refer to the taking of money or assets from a business by its owner for personal use. This action does not generate income for the business nor does it represent an expense. Instead, it reduces the owner’s equity in the business, as it reflects the owner taking funds out rather than using the business assets to generate profit. Understanding withdrawals is crucial because they affect the overall equity in the business and can impact cash flow. In contrast, revenue pertains to income generated from business operations, expenses are costs incurred in the process of generating revenue, and sales are transactions that involve the exchange of goods or services for money. None of these options represent the withdrawal of funds for personal use, making withdrawals the distinct financial event in question.