Accounting Equation Problems MCQs 2

Which of the following transactions decreases assets and liabilities?

Revenue earned

Owner’s investment

Goods purchased on credit

Loan repayment in cash

Correct! Wrong!

Which element is missing? Assets = Liabilities + ____?

Owner’s Equity

Expenses

Revenue

Drawings

Correct! Wrong!

The effect of drawings on the accounting equation is?

Decrease assets, decrease equity

Increase assets, increase equity

Increase assets, decrease liabilities

Increase equity, decrease liabilities

Correct! Wrong!

Which transaction increases both assets and liabilities?

Owner withdrawal

Paying wages in cash

Paying electricity bill

Buying inventory on credit

Correct! Wrong!

Which of the following leaves total assets unchanged?

Cash received from a loan

Buying equipment with cash

Owner’s investment

Cash sales

Correct! Wrong!

Which transaction increases one asset and decreases another asset?

Purchasing equipment for cash

Receiving a loan

Owner investment

Paying salaries

Correct! Wrong!

If total assets are $100,000 and liabilities are $40,000, owner’s equity equals?

$100,000

$140,000

$60,000

$40,000

Correct! Wrong!

Which transaction affects only the equity side of the equation?

Owner withdraws cash

Borrowing from bank

Purchase of inventory for cash

Paying supplier

Correct! Wrong!

If liabilities are $10,000 and equity is $25,000, assets are?

$35,000

$10,000

$15,000

$25,000

Correct! Wrong!

Which of the following transactions increases assets and decreases liabilities?

Cash received from bank loan

Paying creditor with cash

Buying supplies for cash

Collecting cash from debtors

Correct! Wrong!

Which of the following transactions decreases assets and liabilities?

Which element is missing? Assets = Liabilities + ____?

The effect of drawings on the accounting equation is?

Which transaction increases both assets and liabilities?

Which of the following leaves total assets unchanged?

Which transaction increases one asset and decreases another asset?

If total assets are $100,000 and liabilities are $40,000, owner’s equity equals?

Which transaction affects only the equity side of the equation?

If liabilities are $10,000 and equity is $25,000, assets are?

Which of the following transactions increases assets and decreases liabilities?

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