Accounting Equation Problems MCQs 2

Which of the following transactions decreases assets and liabilities?

Owner’s investment

Revenue earned

Goods purchased on credit

Loan repayment in cash

Correct! Wrong!

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

$100,000

$140,000

$40,000

$60,000

Correct! Wrong!

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

$25,000

$10,000

$15,000

$35,000

Correct! Wrong!

Which element is missing? Assets = Liabilities + ____?

Drawings

Revenue

Expenses

Owner’s Equity

Correct! Wrong!

The effect of drawings on the accounting equation is?

Decrease assets, decrease equity

Increase assets, increase equity

Increase equity, decrease liabilities

Increase assets, decrease liabilities

Correct! Wrong!

Which of the following transactions increases assets and decreases liabilities?

Collecting cash from debtors

Cash received from bank loan

Buying supplies for cash

Paying creditor with cash

Correct! Wrong!

Which transaction increases both assets and liabilities?

Paying electricity bill

Buying inventory on credit

Paying wages in cash

Owner withdrawal

Correct! Wrong!

Which transaction affects only the equity side of the equation?

Borrowing from bank

Paying supplier

Owner withdraws cash

Purchase of inventory for cash

Correct! Wrong!

Which transaction increases one asset and decreases another asset?

Purchasing equipment for cash

Owner investment

Paying salaries

Receiving a loan

Correct! Wrong!

Which of the following leaves total assets unchanged?

Buying equipment with cash

Cash sales

Cash received from a loan

Owner’s investment

Correct! Wrong!

Which of the following transactions decreases assets and liabilities?

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

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

Which element is missing? Assets = Liabilities + ____?

The effect of drawings on the accounting equation is?

Which of the following transactions increases assets and decreases liabilities?

Which transaction increases both assets and liabilities?

Which transaction affects only the equity side of the equation?

Which transaction increases one asset and decreases another asset?

Which of the following leaves total assets unchanged?

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