Gce Model Questions Vol1 2021 Financial Accounting Question 17

Practice objective / multiple choice question 17 from the 2021 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2021 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 17 GCE_MODEL_QUESTIONS_VOL1 • 2021 • FINANCIAL_ACCOUNTING • objective

A partnership purchases equipment for \(₦50,000\) cash. Using the accounting equation \(\text{Assets}=\text{Liabilities}+\text{Equity}\), state the effect of this transaction on each component of the equation.

Answer Options

A. Assets: no net change (increase equipment ₦50,000, increase cash ₦50,000); Liabilities: no change; Equity: no change
Correct Answer B. Assets: no net change (increase equipment ₦50,000, decrease cash ₦50,000); Liabilities: no change; Equity: no change
C. Assets: decrease ₦50,000 (cash); Liabilities: increase ₦50,000; Equity: no change
D. Assets: increase ₦50,000 (equipment); Liabilities: no change; Equity: decrease ₦50,000 (cash)
Correct Answer
B
Correct Option:
Assets: no net change (increase equipment ₦50,000, decrease cash ₦50,000); Liabilities: no change; Equity: no change

About This Question

This is Gce Model Questions Vol1 2021 Financial Accounting Question 17. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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