MCQs / Q&A

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)

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

A. Drawings
B. Income
C. Gains
D. Fresh capital

Capital increases if _________ increases?

A. Expenses
B. Drawings
C. Interest on capital
D. Revenue

Calculate the amount of cash if: Total assets=$10,000 Total liabilities=$10,000 Total Capital=$5000

A. $6000
B. $10,000
C. $5000
D. $1000

Find out the value of assets if: Liabilities=$5000 and Capital=$1000

A. $4000
B. $6000
C. $7000
D. $3000

The Basic accounting equation is___________?

A. Asset=Expense +Income
B. Assets=Cash+Capital
C. Assets=Capital+Liabilities
D. Assets=Expenses+Capital