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1)

The Basic accounting equation is

A)  Asset=Expense +IncomeWRONG ANSWER

B)  Assets=Cash+CapitalWRONG ANSWER

C)  Assets=Capital+LiabilitiesRIGHT ANSWER!!!

D)  Assets=Expenses+CapitalWRONG ANSWER


2)

Find out the value of assets if: Liabilities=$5000 and Capital=$1000

A)  $4000WRONG ANSWER

B)  $6000RIGHT ANSWER!!!

C)  $7000WRONG ANSWER

D)  $3000WRONG ANSWER


3)

Calculate the amount of cash if: Total assets=$10,000 Total liabilities=$10,000 Total Capital=$5000

A)  $6000WRONG ANSWER

B)  $10,000WRONG ANSWER

C)  $5000RIGHT ANSWER!!!

D)  $1000WRONG ANSWER


4)

Capital increases if ______ increases

A)  ExpensesWRONG ANSWER

B)  DrawingsWRONG ANSWER

C)  Interest on capitalWRONG ANSWER

D)  RevenueRIGHT ANSWER!!!


5)

Capital of a business decreases if there is an increase in

A)  DrawingsRIGHT ANSWER!!!

B)  IncomeWRONG ANSWER

C)  GainsWRONG ANSWER

D)  Fresh capitalWRONG ANSWER


6)

If the total liabilities of a business decrease by $5000 what will be the effect on total asset? (assuming the amount of capital remain same)

A)  Remain constantWRONG ANSWER

B)  Decrease by $5000RIGHT ANSWER!!!

C)  Increase by $5000WRONG ANSWER

D)  Increase by $10,000WRONG ANSWER


7)

If the business's owner withdraws cash for his/her personal use what will be the effect on capital?

A)  Increase in capitalWRONG ANSWER

B)  Remain the sameWRONG ANSWER

C)  Decrease in capitalRIGHT ANSWER!!!

D)  No effect on capitalWRONG ANSWER


8)

Net income equal to Revenues minus

A)  GainsWRONG ANSWER

B)  DepreciationWRONG ANSWER

C)  ExpensesRIGHT ANSWER!!!

D)  Capital expendituresWRONG ANSWER


9)

Collection of account receivable will

A)  Increase assets and decrease assetsRIGHT ANSWER!!!

B)  Increase assets and decrease liabilitiesWRONG ANSWER

C)  Increase assets and increase capitalWRONG ANSWER

D)  Increase assets and increase cashWRONG ANSWER


10)

Payment of expenses will ______ the assets

A)  IncreaseWRONG ANSWER

B)  ReduceRIGHT ANSWER!!!

C)  apportionWRONG ANSWER

D)  OverstateWRONG ANSWER








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