Accounting Mcqs

Page No. 60

Fresh capital introduction will increase____________?


aAssets and liabilities

✖


bAssets and equity

✓


cLiabilities and equity and bank balance

✖


dCapital and liabilities

✖


View Answer Assets and equity

Which of the following accounting equation is correct?


aCash+Other assets=Capital-Liabilities

✖


bCapital+ Liabilities=Assets+Income

✖


cAssets-Liabilities=Capital

✓


dAssets+Capital=Liabilities

✖



Which of the following is the practical implementation of the accounting equation?


aCash flow statement

✖


bIncome statement

✖


cStatement of changes in equity

✖


dStatement of financial position

✓



Payment of expenses will ______ the assets


aIncrease

✖


bReduce

✓


capportion

✖


dOverstate

✖


View Answer Reduce

Collection of account receivable will


aIncrease assets and decrease assets

✓


bIncrease assets and decrease liabilities

✖


cIncrease assets and increase capital

✖


dIncrease assets and increase cash

✖



Net income equal to Revenues minus____________?


aGains

✖


bDepreciation

✖


cExpenses

✓


dCapital expenditures

✖


View Answer Expenses

If the business’s owner withdraws cash for his/her personal use what will be the effect on capital?


aIncrease in capital

✖


bRemain the same

✖


cDecrease in capital

✓


dNo effect on capital

✖


View Answer Decrease in capital

If the total liabilities of a business decrease by $5000 what will be the effect on total asset? 0 (assuming the amount of capital remain same)


aRemain constant

✖


bDecrease by $5000

✓


cIncrease by $5000

✖


dIncrease by $10,000

✖


View Answer Decrease by $5000

Capital of a business decreases if there is an increase in___________?


aDrawings

✓


bIncome

✖


cGains

✖


dFresh capital

✖


View Answer Drawings

Capital increases if _________ increases?


aExpenses

✖


bDrawings

✖


cInterest on capital

✖


dRevenue

✓


View Answer Revenue

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