8. Which of the following is not a main section of the conceptual framework of a

Question

8. Which of the following is not a main section of the conceptual framework of accounting? (a) the objective of financial reporting (b) the going concern assumption (c) financial analysis (d) the elements of financial statements 9. The ability of a business to pay obligations that are expected to become due within the nest year is called (a) leverage. (b) liquidity (c) profitability (d) solvency 10. The Unearned revenue account is classified as an) (a) asset. (b) revenue. (c) expense (d) liability. 11. Which of the following is an asset? (a) Service Revenue (b) Bank Loan Payable (c) Supplies Expense (d) Prepaid Rent 12. When a service has been performed, but no cash has been received, which of the following statements is true? (a) No journal entry is made. (b) The entry includes a debit to Accounts Payable. (c) The entry includes a credit to Unearned Revenue. (d) The entry includes a debit to Accounts Receivable. 13. Which of the following journal entries is recorded correctly in the basic format (igmoring explanations)? 550 (a) Salaries Expense 9s0 1Soo 550 Cash... Advertising Expense... (b) Salaries Expense 950 Advertising Expense. Cash. 1.500 (c) Salaries Expense 550 950 Advertising Expense 1.500 Cash Ss0 1s0o 550 950 (d)Cash Salaries Expense.. Advertising Expense 14. On February i. Top Shop Barbecues signed a 3%, thirteen-month bank loan payable for $120,000 to help finance increases in inventory for the spring and summer season. Assuming no entries have been made previously for the interest on this loan, what is the required adjusting entry for the interest accrued to December 31? (a) Interest Expense 3,300 Interest Payable Interest Payable Cash Interest Payable 3,600 (b) Interest Expense (c) Interest Expense (d) Interest Expen 1500 300 1.500

Explanation / Answer

8. (c) , financial analysis of financial statment is not a main section of conceptual framework of accounting. it is defined as assessment of a business through its financial stability and profitability

9. (b) , ability to pay obligations within the neaxt year or operating cycle is called liquidity

10. (d) , this income has not been earned yet, but received.

11. (d) , Prepaid rent is the rent expense in advance for coming years

12. (d) , Journal entry will be :   

  

13. (c) , Debit side of items must be recorded one sidedly and credit side items must be recorded after some space

14. (a) ,

Accounts receivable Amount To service revenue Amount

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