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Chapter 2: The accounting equation

Authored by Thu Tran

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University

Used 4+ times

Chapter 2: The accounting equation
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9 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The accounting equation can be written as:

Assets + profits - drawings - liabilities = closing capital

Assets - liabilities - drawings = opening capital + profit

Assets - liabilities - opening capital + drawings = profit

Opening capital + profit - drawings - liabilities = assets

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The capital of a sole trader would change as a result of

a credit customer paying by bank transfer

raw materials being purchased on credit

non-current assets being purchased on credit

personal petrol being paid for out of the business's petty cash

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The purpose of the financial statement that lists an entity's total assets and total capital and liabilities is to show:

the financial performance of the entity over a period of time

the amount the entity could be sold for in liquidation

the amount the entity could be sold for as a going concern

the financial position of the entity at a particular point in time

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A sole trader is £5,000 overdrawn at her bank and receives £1,000 from a credit customer in respect of its account. Which element(s) of the accounting equation will change due to this transaction?

Assets and liabilities

Liabilities only

Assets only

Assets, liabilities and capital

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A sole trader purchases goods on credit. Which element(s) of the accounting equation will change due to this transaction?

Assets and liabilities

Assets and capital

Capital and liabilities

Assets only

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A sole trader borrows £10,000 from a bank. Which element(s) of the accounting equation will change due to this transaction?

Assets and liabilities

Assets and capital

Capital and liabilities

Assets only

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A sole trader sells goods for cash for £500 which had cost £300. Which element(s) of the accounting equation will change due to this transaction?

Assets and liabilities

Assets and capital

C. Capital and liabilities

D. Assets only

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