The 'Excess Grant' is: MCQ with Answer and Explanation
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Question #1
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Which of the following is/are correct regarding the accounting equation? 1. The equation always holds true under the double entry system. 2. Purchase of goods on credit increases assets and liabilities. 3. Payment to creditors decreases assets and increases liabilities. 4. Introduction of capital by the proprietor increases both assets and capital.
Correct Answer: Option C
Explanation:
Statement 3 is incorrect because payment to creditors decreases both assets (cash/bank) and liabilities (creditors). 1, 2, and 4 are correct.
Statement 3 is incorrect because payment to creditors decreases both assets (cash/bank) and liabilities (creditors). 1, 2, and 4 are correct.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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What is the rule of Double Entry for Real Accounts?
Correct Answer: Option C
Explanation:
Real accounts relate to tangible or intangible assets. The golden rule is 'Debit what comes in, Credit what goes out'.
Real accounts relate to tangible or intangible assets. The golden rule is 'Debit what comes in, Credit what goes out'.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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The term 'Matching Concept' requires that:
Correct Answer: Option B
Explanation:
The matching concept dictates that expenses incurred in a period must be recognized in the same period as the revenues they helped to generate.
The matching concept dictates that expenses incurred in a period must be recognized in the same period as the revenues they helped to generate.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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