Question

8. In the first month of operations, the total of the debit entries in accounts payable amounted to $2,000 and the total of the credit entries in accounts payable account amounted to $6,000. The account has a

A) $4,000 credit balance.

B) $6,000 credit balance.

C) $4,000 debit balance.

D) None of the above.

9. Which of the following is not a liability?

A) income tax payable.

B) accounts payable.

C) unearned revenue.

D) Professional fees.

10. A classified balance sheet is used to;

A) separate the components of assets and liabilities.

B) Has revenues and expenses included.

C) receive a loan.

D) None of the above.

Answer 1

8. Here credit balance is more than debit balance for an amount of $4,000

Answer is A) $4,000 credit balance.

9. Professionsal fee is not a liability. it is an income statement item

10. Classified balance sheet will show assets and liabilities seperately. Revenues and Expenses will include only in income statement. difference of revenue and expenses (net income) will report in balance sheet

Answer is A) separate the components of assets and liabilities.

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