Accounting Equation Problems MCQs 2

Which transaction increases both assets and liabilities?

Owner withdrawal

Paying wages in cash

Buying inventory on credit

Paying electricity bill

Correct! Wrong!

Which transaction increases one asset and decreases another asset?

Receiving a loan

Purchasing equipment for cash

Owner investment

Paying salaries

Correct! Wrong!

Which element is missing? Assets = Liabilities + ____?

Expenses

Owner’s Equity

Revenue

Drawings

Correct! Wrong!

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

$35,000

$10,000

$25,000

$15,000

Correct! Wrong!

Which transaction affects only the equity side of the equation?

Paying supplier

Purchase of inventory for cash

Owner withdraws cash

Borrowing from bank

Correct! Wrong!

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

$60,000

$100,000

$140,000

$40,000

Correct! Wrong!

The effect of drawings on the accounting equation is?

Increase assets, decrease liabilities

Decrease assets, decrease equity

Increase assets, increase equity

Increase equity, decrease liabilities

Correct! Wrong!

Which of the following transactions increases assets and decreases liabilities?

Buying supplies for cash

Collecting cash from debtors

Cash received from bank loan

Paying creditor with cash

Correct! Wrong!

Which of the following transactions decreases assets and liabilities?

Owner’s investment

Goods purchased on credit

Loan repayment in cash

Revenue earned

Correct! Wrong!

Which of the following leaves total assets unchanged?

Cash sales

Buying equipment with cash

Cash received from a loan

Owner’s investment

Correct! Wrong!

Which transaction increases both assets and liabilities?

Which transaction increases one asset and decreases another asset?

Which element is missing? Assets = Liabilities + ____?

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

Which transaction affects only the equity side of the equation?

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

The effect of drawings on the accounting equation is?

Which of the following transactions increases assets and decreases liabilities?

Which of the following transactions decreases assets and liabilities?

Which of the following leaves total assets unchanged?

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