MCQs Answer all questions (10 x 1 marks = 10 marks)

1- Client Sultan pays Amwaj Co. OMR 1,000 in December for Amwaj to perform services for Ahmed in 45 days. Amwaj uses the accrual basis of accounting. In December Amwaj will debit Cash for OMR 1,000. What will be the other account involved in the December accounting entry prepared by Amwaj (and what type of account is it)?

a- Accounts Receivable (asset)	b- Service Revenues (revenue)
c- Prepaid Services (asset)	d- Unearned Revenues (liability)

2- Sohar Co. has current assets of OMR 50,000 and total assets of OMR 150,000. Sohar has current liabilities of OMR 30,000 and total liabilities of OMR 80,000. What is the amount of Sohar's owner's equity?

a- OMR 20,000	b- OMR 90,000
c- OMR 70,000	d- OMR 120,000

3- For information to be relevant, it has to possess:

a- Only predictive value	b- Both predictive and confirmatory value
c- Only confirmative value	d- Either predictive or confirmatory value, or both

4- Which statement is included in the Conceptual Framework?

a- Relevance is a fundamental qualitative characteristic of useful financial information	b- Financial information without both relevance and faithful representation is not useful
c- All of the above	d- None of the above

5- All of the following are objectives of financial reporting except to provide information

a- That is useful in investment and credit decisions.	b- About the management and major shareholders of an enterprise.
c- That is useful in assessing cash flow prospects.	d- About enterprise resources, claims to those resources, and changes in them.

6- The Conceptual Framework defines an asset as:

a- A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity	b- A present economic resource controlled by the entity as a result of past events
c- A right to receive income or reduce expenses in the future	d- None of the above

7- Which is an example of a cash flow from an operating activity?

a- Payment of cash to lenders for interest.	b- Payment of cash dividends to the companys stock holders.
c- Receipt of cash from the sale of capital stock.	d- None of the above.

8- Free cash flow provides an indication of a companys ability to:

a- Generate a net income	b- Generate cash to pay dividends
c- Generate cash to invest in new capital expenditures	d- Both b and c

9- Net income is OMR 132000, accounts payable increased OMR 10000 during the year, inventory decreased OMR6000 during the year, and accounts receivable increased OMR 12000 during the year. Under the direct method, what is net cash provided by operating activities?

a- OMR. 102000	b- OMR. 112000
c- OMR. 124000	d-OMR. 136000

10- Major sources of GAAP are:

a- FASB Standards, Interpretations, and Staff Positions	b- APB Opinions
c- AICPA Accounting Research Bulletins	d- All of the above