Neco Model Questions Vol1 2018 Financial Accounting Question 29

Practice objective / multiple choice question 29 from the 2018 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2018 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 29 NECO_MODEL_QUESTIONS_VOL1 • 2018 • FINANCIAL_ACCOUNTING • objective

A sole trader pays ₦20,000 cash for advertising expenses. Indicate the effect of this transaction on the accounting equation \(\text{Assets} = \text{Liabilities} + \text{Owner's Equity}\).

Answer Options

A. Assets decrease by ₦20,000; Liabilities decrease by ₦20,000; Owner's Equity unchanged
B. Assets decrease by ₦20,000; Liabilities unchanged; Owner's Equity unchanged
Correct Answer C. Assets decrease by ₦20,000; Liabilities unchanged; Owner's Equity decreases by ₦20,000
D. Assets unchanged; Liabilities unchanged; Owner's Equity decreases by ₦20,000
Correct Answer
C
Correct Option:
Assets decrease by ₦20,000; Liabilities unchanged; Owner's Equity decreases by ₦20,000

About This Question

This is Neco Model Questions Vol1 2018 Financial Accounting Question 29. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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