MCQs / Q&A

Current assets – Current liabilities=?

A. Capital
B. Absorbed capital
C. Net assets
D. Net working capital

An increase in provision for bad debt will____________?

A. Decrease net income
B. Decrease liabilities
C. Increase net income
D. Increase liabilities

Depreciation decreases____________?

A. Liabilities
B. Cash
C. Bank
D. Capital

If Cash=$1000 inventories=$4000 Debtors=$5000 fixed assets=? Capital+Liabilities=$15000 What is the Amount of total assets?

A. $5000
B. $10,000
C. $15,000
D. $20,000

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