Accounting Equation Problems MCQs 1

Which of the following will not change the total assets?

Receiving cash from customers

Taking a bank loan

Owner’s cash investment

Paying cash to buy equipment

Correct! Wrong!

Which transaction decreases assets and decreases equity?

Selling goods for cash

Owner invests cash

Paying office rent

Borrowing from a bank

Correct! Wrong!

If a business buys equipment on credit, the accounting equation will?

Decrease assets and increase equity

Increase liabilities and decrease equity

Only affect expenses

Increase assets and increase liabilities

Correct! Wrong!

When a company borrows cash from a bank?

Assets increase and liabilities increase

Liabilities decrease and equity increases

Assets increase and equity increases

Assets decrease and liabilities increase

Correct! Wrong!

Revenue earned in cash affects?

Assets decrease, equity increases

Assets increase, equity increases

Assets decrease, liabilities decrease

Liabilities increase, assets decrease

Correct! Wrong!

If assets are $50,000 and liabilities are $20,000, equity equals?

$20,000

$70,000

$30,000

$50,000

Correct! Wrong!

Which will decrease assets and liabilities simultaneously?

Receiving payment from debtors

Paying off a bank loan

Buying inventory on credit

Earning revenue

Correct! Wrong!

Paying cash to settle a supplier’s account will?

Increase assets and increase liabilities

Decrease liabilities and increase equity

Decrease assets and decrease liabilities

Increase assets and decrease equity

Correct! Wrong!

Which transaction increases both assets and owner’s equity?

Purchase of furniture for cash

Cash sales to customers

Paying rent

Payment of salaries

Correct! Wrong!

Which of the following best represents the basic accounting equation?

Assets = Revenue + Expenses

Assets = Liabilities – Owner’s Equity

Liabilities = Assets + Equity

Assets = Liabilities + Owner’s Equity

Correct! Wrong!

Which of the following will not change the total assets?

Which transaction decreases assets and decreases equity?

If a business buys equipment on credit, the accounting equation will?

When a company borrows cash from a bank?

Revenue earned in cash affects?

If assets are $50,000 and liabilities are $20,000, equity equals?

Which will decrease assets and liabilities simultaneously?

Paying cash to settle a supplier’s account will?

Which transaction increases both assets and owner’s equity?

Which of the following best represents the basic accounting equation?

Submit a Comment Cancel reply

Search