Accounting MCQs / Q&A

Which of following best describes the increase in equity expands___________?

A. Business operations
B. cash outflows
C. Inflows of cash
D. Appropriation expenses

Cash received for services rendered will______________?

A. Increase cash and liability
B. Increase equity and liability
C. Increase fixed assets and cash
D. Increase cash and equity

Fresh capital introduction will increase____________?

A. Assets and liabilities
B. Assets and equity
C. Liabilities and equity and bank balance
D. Capital and liabilities

Which of the following accounting equation is correct?

A. Cash+Other assets=Capital-Liabilities
B. Capital+ Liabilities=Assets+Income
C. Assets-Liabilities=Capital
D. Assets+Capital=Liabilities

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

A. Cash flow statement
B. Income statement
C. Statement of changes in equity
D. Statement of financial position

Payment of expenses will ______ the assets

A. Increase
B. Reduce
C. apportion
D. Overstate

Collection of account receivable will

A. Increase assets and decrease assets
B. Increase assets and decrease liabilities
C. Increase assets and increase capital
D. Increase assets and increase cash

Net income equal to Revenues minus____________?

A. Gains
B. Depreciation
C. Expenses
D. Capital expenditures

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

A. Increase in capital
B. Remain the same
C. Decrease in capital
D. No effect on capital

(assuming the amount of capital remain same)