Question

Which of the following is not a liability?

A)          income tax payable.

B)          accounts payable.

C)           unearned revenue.

D)          Professional fees.

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.

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.

Answer 1

1.

Professional fee is a revenue. It is not a liability.

Correct option is (D)

Income tax payable, accounts payable and unearned revenue are current liabilities.

2.

A classified balance sheet is used to separate the components of assets and liabilities.

Correct option is (A)

3.

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 $4,000 credit balance.

Correct option is (A)

Accounts payable balance = Total of credits - Total of debits

= 6,000 - 2,000

= $4,000