2024_Equities_ POA_LHH

(1) Transactions that affect the business are recorded while transactions relating to the owner but do not affect the business are not recorded. This is _________

• Going concern theory

• Accounting entity theory

• Monetary theory

• Objectivity theory

(2) State the journal entry when losses are transferred to capital account

• Dr Income summary, Cr Capital

• Dr Capital, Cr Income Summary

• Dr Income summary, Cr loss

• Dr loss, Cr income summary

(3) Drawings is _________ in nature and it will _________Capital

• Dr nature, increase

• Dr nature, reduce

• Cr nature, increase

• Cr nature, reduce

(4) State the CR ENTRY when owner contributes cheque into business

• Cash at bank

• Cash in hand

• Drawings

• Capital

(5) Owner withdrew inventory for personal use. This will appear in _________ column of Drawings account.

• Dr column

• Cr column

• Bal column

• no need to record

(6) Journal entry when loss is transferred to capital account

• Dr Capital, Cr income summary

• Dr income summary, Cr Capital

• Dr Capital, Cr loss

• Dr loss, Cr capital

(7) Beginning capital $1 000. Profit for the year 200, Drawings $50. Calculate ending capital

• $1250

• $750

• $1150

• $850

(8) Which of the following statement is true?

• Drawing is an expense

• Drawing is closed off to income summary

• Drawing is shown in the statement of financial performance

• Drawing is closed off to capital account

(9) Owner contributes equipment into business, so Capital account is _________

• increased

• reduced

• increased and reduced

• no change

(10) Owner withdrew goods for personal use, so drawings account will be ______

• debited

• credited

• balanced

• no change