Financial Statements and Analysis Test

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Financial Statements and Analysis Test - 25

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Weekly Quiz Competition

Question 1
1 / -0

A has $$Rs. 3,500$$ due from B. On January $$20$$, B makes a partial payment of $$Rs. 2,100$$ to A. The journal entry made on January $$20$$ by A to record this transaction include_________.

A
A credit to the cash received account of $$Rs. 2,100$$

B
A credit to B's account of $$Rs. 2,100$$

C
A debit to the cash account of $$Rs. 1,400$$

D
A debit to B's account of $$Rs. 1,400$$
Question 2
1 / -0

If an individual asset is increased, there will be a corresponding ____________________.

A
Increase of another asset or increase of capital

B
Decrease of another asset or increase of liability

C
Decrease of specific liability or decrease of capital

D
Increase of drawings and liabiltiy
Question 3
1 / -0

Purchase of furniture for cash would ______________________.

A
Increase the fixed assets and reduce the current assets

B
Reduce the fixed assets and increase the current assets

C
Increase total assets

D
Both (a) and (b)

Solution

The purchase of furniture for cash will be recorded as:
Furniture A/c Dr.
To Cash A/c
This entry will increase the amount of furniture (fixed assets) and decrease cash (current assets).
Question 4
1 / -0

On sale of old furniture, owner's equity would ______________.

A
Increase

B
Decrease

C
Remain unchanged

D
May or may not change

Solution

The sale of furniture may result in a profit that will increase the owner's equity or a loss that will decrease it. It may also happen that the furniture is sold at its book value so that neither profit nor loss occurs and the owner's equity remains same. Hence, option (d) is correct.
Question 5
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Payment of a liability results in _________________.

A
Increase in total assets

B
Decrease in total assets

C
No change in total assets

D
None of these

Solution

Payment of a liability results in reduction of liability and outflow of cash. Outflow of cash leads to decrease in the total assets.
Therefore, B is the correct option.
Question 6
1 / -0

Mr. Bhandari purchased a car for Rs. 50,000, making a down payment of Rs. 10,000 and signing a Rs. 40,000 bill payable due in 60 days. As a result of this transaction ___________________.

A
Total assets increased by Rs. 50,000

B
Total liabilities increased by Rs. 40,000

C
Total assets increased by Rs. 40,000

D
Total assets increased by Rs.. 40,000 with corresponding increase in liabilities by Rs. 40,000
Question 7
1 / -0

Income earned and collected results in _________________.

A
Increase of assets and increase in capital

B
Decrease in assets and increase in capital

C
Increase in assets and decrease in liability

D
Decrease in assets and increase in liability

Solution

Any income earned is a profit for the business and such income increases the owner's capital in the period when it is earned. When the income is collected, it increases the assets as it results in cash inflow for the business in the period when it is collected. Hence, option (a) is correct.
Question 8
1 / -0

Withdrawals by the proprietor would_______.

A
Reduce both assets and owner's equity

B
Reduce assets and increase liabilities

C
Reduce owner's equity and increase liabiltiy

D
No change

Solution

Withdrawals by the proprietor results in decrease in cash and decrease in capital. Decrease in cash means decrease in assets and decrease in capital means decrease in liabilities.
Therefore, A is the correct option.
Question 9
1 / -0

Stimulus: Support staff is undisciplined.
Response: It is a sign of the times.
How will you classify the above transaction as per concept of transactional analysis ______________.

A
Parent - Child

B
Parent - Adult

C
Parent - Parent

D
Child - Parent
Question 10
1 / -0

You require capital for purchase of fixed assets. What is this capital called?

A
Floating capital

B
Reserve capital

C
Circulating capital

D
Fixed capital

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Financial Statements and Analysis Test - 25

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Financial Statements and Analysis Test - 25

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SHARING IS CARING

Question 1

A credit to the cash received account of $$Rs. 2,100$$

A credit to B's account of $$Rs. 2,100$$

A debit to the cash account of $$Rs. 1,400$$

A debit to B's account of $$Rs. 1,400$$

Question 2

Increase of another asset or increase of capital

Decrease of another asset or increase of liability

Decrease of specific liability or decrease of capital

Increase of drawings and liabiltiy

Question 3

Increase the fixed assets and reduce the current assets

Reduce the fixed assets and increase the current assets

Increase total assets

Both (a) and (b)

Solution

Question 4

Increase

Decrease

Remain unchanged

May or may not change

Solution

Question 5

Increase in total assets

Decrease in total assets

No change in total assets

None of these

Solution

Question 6

Total assets increased by Rs. 50,000

Total liabilities increased by Rs. 40,000

Total assets increased by Rs. 40,000

Total assets increased by Rs.. 40,000 with corresponding increase in liabilities by Rs. 40,000

Question 7

Increase of assets and increase in capital

Decrease in assets and increase in capital

Increase in assets and decrease in liability

Decrease in assets and increase in liability

Solution

Question 8

Reduce both assets and owner's equity

Reduce assets and increase liabilities

Reduce owner's equity and increase liabiltiy

No change

Solution

Question 9

Parent - Child

Parent - Adult

Parent - Parent

Child - Parent

Question 10

Floating capital

Reserve capital

Circulating capital

Fixed capital

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