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1. Accounting equation and more (Read Below)
Below are some of the most important questions on "Accounting equation". All questions are most likely to be asked in.
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Mcqs on accounting equation and
journal entries
1. Formula for the accounting equation
Assets = liabilities + shareholder’s equity
2. Accounting equation based on?
Double-entry system of accounting
3. Following transactions would be recorded in the accounting
system based on the money measurement concept?
Value of a plant and machinery of company
4. The accounting equation represents that the sources in a
business are equal to the resources of that business
True
5. Assets which are convertible into cash within a year are known
as
Current assets
6. Correct equation
Assets = capital + liabilities
7. On January 1st, 2009 an entity's balance sheet showed total
assets of rs. 750 and liabilities of rs. 250. Owners' equity at January 1st
was?
Rs. 500.
Hint. 750-250 =500
8. If the assets of business are 100,000 and equity
is rs. 20,000, the value of liability will be?
rs.
80,000
Hint. 100000-20000 = 80000
9. Accounting equation
should remain in balance because every transaction affects ------accounts?
Two or more
10. Correct form of the accounting equation?
assets
+ owner’s equity = liabilities
11. Find out value of account receivable from following cash =
48,000 account payable = 33,000 office equipment = 21,000 , owner equity = 77,000?
(b) Ans 41,000.
Hint. Capital + Creditor = Cash + Debitor + office
equipment
12. A company’s assets increase by 80,000,000. Liabilities decrease by 20,000,000. Equity must, therefore?
Increase by 100,000,000
13. Expresses the relationship between assets (a), liabilities
(l), revenues (r), expenses (e) and capital (c)?
A = c + l + (r-e)
14. The liabilities of a business are rs. 30,000; the capital of a
proprietor is 70,000. The total assets are?
100000
15. Following account is affected from the drawings of cash in
sole-proprietorship business?
Liability account
16. Mr. “a” borrowed money from bank; this transaction involves following
accounts?
Cash & bank loan
17. Following accounts will be used in equation, if the goods are
sold on credit to Mr. X?
Account receivable and owner’s equity
18. The favorable balance of profit and loss account should be?
added in capital
19. Following is not a satisfactory statement of the balance sheet
equation?
Assets = liabilities - owner’s equity
20. Revenue of the business includes?
Cash sales and credit sales
21. The transaction having no impact on stockholders' equity is?
Purchase of land on credit
22. Any business event that is measurable in terms of money and
can also be recorded in the account books is called
Transaction
23. Following items are considered as revenue for a business?
Cash sales and credit sales
24. following accounts will be affected by a transaction where the
company receives from a debtor?
Debtors and cash
25. Following concepts means that the identity of a business is
separate from its owner?
Business entity concept
26. The amount brought in by owner of the business should be
credited to
Owner equity
26.1 The transactions having no impact on stockholders' equity is?
Purchasing a land from bank loan
27. Following
transactions occur on daily basis in a large business organisation?
Credit
sales
28. How much
types a transaction has?
Two
29.
Transactions are initially recorded in the?
Book
of original entry
30. From the
following account types, Which one would increase by a debit?
Assets
and expenses
31. Sales
made to ahmed on credit should be debited to?
Account
receivable-ahmed
32. Based on
the rules of debit and credit for a balance sheet accounts?
Decrease
in liability & owner’s equity are recorded by a debit
33. The order
in which the journal lists transactions?
Chronological
34. All of
the following are true regarding journal entries except?
Journal
entries provide account balances
35. Following
accounts would be increased with a debit?
Expenses
36. Following
account will be credited in the books of xyz Ltd, if business purchase a vehicle by cheque?
Bank
account
37. The
abbreviations for debit and credit (dr. And cr.) Come from what language words?
latin, debere and
credere
38. following
is used to record financial transactions in date wise order?
General
journal
39. Accrued
expenses are also called?
Accrued
liabilities
40. following
is called the book of original entry?
general journal
41. Following
account/s will be affected under the rule of accrual accounting, when furniture
is purchased on cash?
cash &
furniture account
42. Purchased
goods from Ahmed for cash should be credited to?
Cash
a/c
43.
Commission received is an example of?
Nominal
a/c