Sales is classified as an which type of account according to the material?

• A. Asset
• B. Owner's Equity
• C. Revenue
• D. Liability

Answer: (B)

Sales is a revenue account. Revenue accounts record income earned from the core business activities, such as selling goods or providing services. When revenue is earned, it increases the owner's equity through higher net income, which adds to retained earnings. Revenue accounts normally have credit balances and are closed to equity at the end of a period, reflecting the impact on the owner's claim. It’s not an asset, liability, or an equity account itself, but a specific category that drives changes in equity. Therefore, the correct classification is Revenue.