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Chapter – 2
Transactions & Accounting Equation
Encircle the most appropriate answer from the following four answers
1) When there is no question of meeting the value of a transaction, it will be known as:
- Credit Transaction
- Paper transaction
- Cash transaction
- None of these
2) If there is no change in total value of assets and liabilities of a business concern it Will considered as:
- Quantitative change
- Economic change
- Qualitative change
- monetary Change
3) Accounting equation is equal to:
- Expenses-Income
- Assets-Liabilities
- Assets + Liabilities
- Liabilities-Assets
4) Expenses paid by a business decrease: .
- Capital
- Cash & Capital
- None of time
- Cash
5) Every transaction affects:
- Two items
- One item
- So many items
- Four items
6) A person who owes money to a business is known as a:
- Debtor
- Solvent
- Creditor
- Investor
7) If furniture purchased on credit basis, it Will be:
- Increase in assets and increase in capital
- Increase assets and increases in expenses
- Increase in assets And increase in liabilities
- Increase in assets and increase in equity
8) Resources owned by the business Liabilities
- Liabilities
- Assets
- Capital
- Profit
9) Furniture purchased for domestic use:
- Decrease in capital and decrease in assets
- Increase in assets and decrease in assets.
- Increase in assets and increase m expenses
- Increase m expenses and increase m liabilities
10)When cash is paid to debtors it will decrease.
- Capital
- Cash
- Debtor
- None of these
11) Claims against assets owed by business are called:
- Liabilities
- Capital
- Equities
- Assets
12) A transaction taking place with an outside person or Organization is called
- None of these
- Internal Transaction
- Paper Transaction
- External Transaction
13) Cash received from debtors. It will be:
- Increase in assets and decrease in assets.
- Increase in liabilities and decrease in assets
- Increase in assets and decrease in Revenue
- None of the above.
14) The accounting equation represents:
- Resources in the business are not equal to the sources of business
- Owner’s give money for business.
- Resources in the business are equal to the sources of business
- Resources are allocated at cost price
15) The excess of assets over liabilities is called:
- Income
- Equities
- Profit
- Capital
16) Sold goods costing Rs. 1500 for Rs. 1750 will increase the owner’ s equity by Rs.:
- 250
- 3250
- 1500
- 1750
17) Purchased goods on credit and for cash will affect:
- Cash, creditors and owner’s equity
- Cash and creditors
- Cash and goods
- Cash and goods & creditors
18) Receiving cash from Azhar will affect.
- Cash And Debtors
- Cash and creditors
- Cash & goods
- Cash and owner’s equity
19) Cash paid to Naeem Will affect
- Cash and debtors
- Cash and owners equity
- Cash and creditors‘.
- Cash And goods
20) All events, which are related to business , are measured in:
- Kilograms
- Money
- Quality
- Quantity
21) The rights possessed by the Owner against the assets of the business are called.
- Owner
- Assets
- Owner’s equity
- Liabilities
22) All debts which are payable to investors and others is:
- Liabilities
- Equities
- Capital
- Expenses