Post Utme Joseph Ayo Babalola University 2025 Accounting Question 10

Practice objective / multiple choice question 10 from the 2025 Post Utme Joseph Ayo Babalola University Accounting examination.

Post Utme Joseph Ayo Babalola University 2025 Accounting Objective / Multiple Choice
Question 10 POST_UTME_JOSEPH_AYO_BABALOLA_UNIVERSITY • 2025 • ACCOUNTING • objective

A partnership prepares a balance sheet at the end of the year. The balance sheet shows the following balances: Cash 10,000, Accounts Payable 5,000, and Common Stock 20,000. If the partnership's net income for the year is 20,000, what is the effect on the balance sheet?

Answer Options

A. Assets increase by 20,000, Liabilities increase by 20,000, and Equity increases by 20,000
Correct Answer B. Assets increase by 20,000, Liabilities decrease by 20,000, and Equity increases by 20,000
C. Assets decrease by 20,000, Liabilities increase by 20,000, and Equity decreases by 20,000
D. Assets decrease by 20,000, Liabilities decrease by 20,000, and Equity decreases by 20,000
Correct Answer
B
Correct Option:
Assets increase by 20,000, Liabilities decrease by 20,000, and Equity increases by 20,000

About This Question

This is Post Utme Joseph Ayo Babalola University 2025 Accounting Question 10. It is one of the objective questions from the 2025 Post Utme Joseph Ayo Babalola University Accounting examination.

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