A loan due for repayment in 22 months’ time has been included as a current liability, what will be the effect when this is corrected?
(a) Increase net assets
(b) reduce net current assets
(c) increase net current assets
(d) no effect on net current assets
Which of the following transaction result in increase of assets and increase in owner’s equity?
(a) Bonus shares issued
(b) Shares issued for cash
(c) A dividend is declared
(d) All of the above
An asset was purchased for Rs. 5,00,000 with the down payment of Rs. 1,00,000 and bills accepted for Rs. 4,00,000. What would be the effect on the total asset and total liabilities in the balance Sheet?
(a) Assets increased by Rs. 4,00,000 and liabilities increased by Rs. 4,00,000
(b) Assets increased by Rs. 4,00,000 and liabilities decreased by Rs. 4,00,000
(c) Assets decreased by Rs. 4,00,000 and liabilities increased by Rs. 4,00,000
(d) Assets increased by Rs. 5,00,000 and liabilities increased by Rs. 4,00,000
Which of the following does not follow dual aspect?
(a) Increase in one asset, decrease in other
(b) Increase in both assets and liability
(c) Decrease in one assets, decrease in other
(d) Increase in one asset and capital
Pearl Ltd. Company purchased a van for Rs. 12,000 making a down payment of Rs. 5,000 cash and signing a Rs. 7,000 note payable in 60 days, As a results of his transaction:
(a) Total assets will increase by Rs. 12,000
(b) Total liabilities will increase by Rs. 7,000
(c) This transactions will not have immediate effect on owner’s equity in the business
(d) From the point of view of short term creditor this transaction will make business more liquid
Choose the correct options:
(a) a and c
(b) b and d
(c) a and b
(d) b and c
Paid utility expenses Rs. 500 in cash. What would be the impact of this transaction on accounting equation?
(a) The assets balance will remain unchanged
(b) Assets and equity will increases by Rs. 500 each
(c) Assets and equity will decrease by Rs. 500 each
(d) Assets will decrease by Rs. 500 and liabilities will increase by Rs. 500.
Identify the transaction that will result in decrease in owner’s equity and increase in liabilities.
(a) Issue of bonus shares
(b) Shares issued in payment of bills payable
(c) Shares issued for purchase of land and building
(d) None of the above
A firm had a capital balance of Rs.1,00,000 at the beginning of a year. At the end of the year, the firm had total assets of Rs.1,50,000 and total liabilities of Rs.70,000. If the total withdrawals during the period were Rs.30,000, what was the amount of Net profit / Net loss for the year?
(a) Rs.10,000 loss
(b) Rs.50,000 loss
(c) Rs.10,000 profit
(d) Rs.20,000 loss
A business borrowed Rs. 60,000 from its bank and used the cash to buy a new computer. How is accounting equation affected by these transactions?
(a) Assets increased; liabilities decreased
(b) Assets unchanged; liabilities increased
(c) Assets increased; liabilities increased
(d) Assets unchanged; liabilities decreased
Which one of the following is a correct equation?
(a) Opening capital = Closing capital + Additional capital – Drawings – Profit
(b) Opening capital = Closing capital + Drawings – Additional capital – Losses
(c) Opening capital = Closing Capital + Drawings – Additional capital – Profit
(d) Opening capital = Closing Capital – Drawings – Additional capital – Profit
