Which of following best describes the increase in equity expands___________?

Related Mcqs:

1. What is equity?

   A. Cash from the business
   B. liability of a business
   C. Owner’s claim on total assets
   D. Owner’s claim on total liabilities

2. Which of the following statements best describes the purpose of depreciation?

   A. Regular reduction of asset value to correspond to changes in market value as the asset ages
   B. A process of correlating the market value of an asset with its gradual decline in physical efficiency
   C. Allocation of cost in a manner that will ensure that Plant and Equipment items are not carried on the Balance Sheet in excess of net realizable value
   D. Allocation of the cost of an asset to the periods in which services are received from the asset

3. Capital of a business decreases if there is an increase in___________?

   A. Drawings
   B. Income
   C. Gains
   D. Fresh capital

4. An increase in provision for bad debt will____________?

   A. Decrease net income
   B. Decrease liabilities
   C. Increase net income
   D. Increase liabilities

5. Credit memo or credit note No. is entered in which of the following journal?

   A. General journal
   B. Cash journal
   C. Purchase journal
   D. Sales return day book

6. If credit side of a bank account is greater than the debit side, it indicates which of the following?

   A. Bank overdraft
   B. Cash at bank
   C. Bank balance
   D. Current Asset

7. Which of the following is the practical implementation of the accounting equation?

   A. Cash flow statement
   B. Income statement
   C. Statement of changes in equity
   D. Statement of financial position

8. Which of the following is not a deferred revenue expenditure?

   A. Expenses in connection with issue of equity shares
   B. Preoperative expenses
   C. Heavy advertising expenses to introduce a new product
   D. Legal expenses incurred in defending a suit for breach of contract to supply goods

9. In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?

   A. Straight-line method
   B. Written down value method
   C. Units-of-production method
   D. Sum-of-the years‘-digits method

10. Which of the following entries is correct in respect of reserve for discounts on accounts payable?

    A. Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c
    B. Debit Accounts Payable A/c and Credit P&L A/c
    C. Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c
    D. Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c