A credit purchase of machinery worth ₹50,000 will: MCQ with Answer and Explanation

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A credit purchase of machinery worth ₹50,000 will:

A. Increase assets and increase liabilities

B. Decrease assets and decrease capital

C. Decrease assets and increase liabilities

D. Increase assets and decrease liabilities

Answer: Option A

Solution (By JKSSB Mock Tests)

Machinery (asset) increases, and a creditor liability increases. So assets and liabilities both increase.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

Under Indian tax law, 'Assessment Year' means:

A. Year in which income is earned

B. Calendar year

C. Year following the previous year, in which income is assessed

D. Financial year

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Correct Answer: Option C

Explanation:
Assessment year is the year in which income of the previous year is assessed and taxed.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

If the total of debit side of trial balance is ₹1,50,000 and credit side is ₹1,45,000, the suspense account will be:

A. Credit ₹1,50,000

B. Debit ₹1,45,000

C. Debit ₹5,000

D. Credit ₹5,000

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Correct Answer: Option D

Explanation:
Credit side is short by ₹5,000, so suspense account is credited to balance.

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Question #3

The balance of the Cash Book is:

A. Always a debit balance

B. Either debit or credit

C. Nil

D. Always a credit balance

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Correct Answer: Option A

Explanation:
Cash Book is a book of original entry and a ledger account. Its balance represents cash in hand, which is always a debit balance (asset).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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