1. Which of the following statements is incorrect?

• Liabilities + Assets = Capital

• Assets – Liabilities = Capital

• Liabilities + Capital = Assets

• Assets - Capital = Liabilities

On January 1st, 2009 an entity's balance sheet showed total assets of Rs. 750 and liabilities of Rs. 250. Owners' equity at January 1st was?

• Rs. 750

• Rs. 1,000

• Rs. 500

• Rs. 250

If the assets of a business are Rs. 100,000 and equity is Rs. 20,000, the value of liability will be?

• Rs. 100,000

• Rs. 80,000

• Rs. 120,000

• (d) 20,000

The accounting equation should remain in balance because every transaction affects how many accounts?

• Only one

• Only two

• Two or more

• Two or more

Which of the following is not a correct form of the Accounting Equation?

• Assets = Claims

• Assets = Liabilities + Owner Equity

• Assets – Liabilities = Owner’s Equity

• Assets + Owner’s Equity = Liabilities

Find out value of account receivable from following Cash Rs. 48,000 account payable Rs. 33,000 office equipment Rs. 21,000 owner equity Rs. 77,000?

• Rs. 21,000

• Rs. 41,000

• Rs. 15,000

• Rs. 110,000

During a reporting period, a company’s assets increase by Rs. 80,000,000. Liabilities decrease by Rs. 20,000,000. Equity must therefore?

• Decrease by Rs. 100,000,000

• Increase by Rs. 100,000,000

• Decrease by Rs. 60,00,000

• Increase by Rs. 60,000,000

The liabilities of a business are Rs. 30,000; the capital of the proprietor is Rs. 70,000. The total assets are?

• Rs.70,000

• Rs. 30,000

• Rs.40,000

• None

Which of the following account is affected from the drawings of cash in sole-proprietorship business?

• Capital account

• Liability account

• Expense account

• Shareholder account

Mr. “A” borrowed money from bank; this transaction involves which one of the following accounts?

• Cash & Bank

• Drawing & Cash

• Cash & Bank Loan

• Bank & Debtors