Neco Model Questions Vol1 2019 Financial Accounting Question 3

Practice objective / multiple choice question 3 from the 2019 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2019 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 3 NECO_MODEL_QUESTIONS_VOL1 • 2019 • FINANCIAL_ACCOUNTING • objective

A business purchases equipment for \(\text{₦}150,000\) cash. State the effect of this transaction on the accounting equation \(\text{Assets} = \text{Liabilities} + \text{Owner's Equity}\).

Answer Options

Correct Answer A. Assets: equipment +₦150,000; cash -₦150,000; total assets unchanged; liabilities unchanged; owner's equity unchanged.
B. Assets: equipment +₦150,000; cash -₦150,000; total assets unchanged; liabilities unchanged; owner's equity decreased by ₦150,000.
C. Assets: equipment +₦150,000; cash -₦150,000; total assets unchanged; liabilities increased by ₦150,000; owner's equity unchanged.
D. Assets: equipment +₦150,000; cash -₦150,000; total assets increased by ₦150,000; liabilities unchanged; owner's equity unchanged.
Correct Answer
A
Correct Option:
Assets: equipment +₦150,000; cash -₦150,000; total assets unchanged; liabilities unchanged; owner's equity unchanged.

About This Question

This is Neco Model Questions Vol1 2019 Financial Accounting Question 3. It is one of the objective questions from the 2019 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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