Gce Model Questions Vol1 2019 Financial Accounting Question 37

Practice objective / multiple choice question 37 from the 2019 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2019 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 37 GCE_MODEL_QUESTIONS_VOL1 • 2019 • FINANCIAL_ACCOUNTING • objective

XYZ Ltd pays \(£5{,}000\) cash to reduce its bank loan. State the effect of this transaction on the accounting equation (Assets = Liabilities + Owner's Equity).

Answer Options

Correct Answer A. Assets ↓ £5,000; Liabilities ↓ £5,000; Owner's Equity unchanged
B. Assets ↓ £5,000; Liabilities ↓ £5,000; Owner's Equity ↓ £5,000
C. Assets unchanged; Liabilities ↓ £5,000; Owner's Equity ↓ £5,000
D. Assets ↓ £5,000; Liabilities unchanged; Owner's Equity ↓ £5,000
Correct Answer
A
Correct Option:
Assets ↓ £5,000; Liabilities ↓ £5,000; Owner's Equity unchanged

About This Question

This is Gce Model Questions Vol1 2019 Financial Accounting Question 37. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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