Alexander Has Just Opened a Bakery & Café in a Busy

question 52

Multiple Choice

Alexander has just opened a bakery & café in a busy New York City neighborhood.He has received an SBA-guaranteed microloan of $13,000.Alexander can use the microloan for all of the following,EXCEPT:

• A)to buy a new dough mixer
• B)to pay off outstanding business-related credit card bills
• C)to pay for a new advertising campaign
• D)to pay rent and utility bills for the building

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Definitions:

Accounting Policies

The specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting financial statements.

Estimation Uncertainty

The degree of approximation involved in certain accounting estimates, which may affect the financial statements.

Income Statement

A financial statement that shows a company's revenues, expenses, and profit over a specific period.

Revenue and Expense Accounts

Accounts used in accounting to track the income generated and expenses incurred by a business, integral to determining net profit or loss.