According to the accounting equation, if a business borrows ₹50,000 from bank, then: MCQ with Answer and Explanation

Question

Share Report Error

According to the accounting equation, if a business borrows ₹50,000 from bank, then:

A. Assets increase, liabilities increase

B. Assets decrease, capital decrease

C. Assets decrease, liabilities increase

D. Assets increase, capital increase

Answer: Option A

Solution (By JKSSB Mock Tests)

Cash (asset) increases, and bank loan (liability) increases.

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

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1

The 'Finance Bill' is presented in Parliament along with:

A. Economic Survey

B. Annual Financial Statement (Budget)

C. Railway budget

D. Monetary policy

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Finance Bill is presented to give effect to tax proposals of the budget.

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

Question #2

In Social Accounting, treating pollution emitted by a factory as a negative entry is an example of pricing an:

A. Opportunity Cost

B. External Cost (Negative Externality)

C. Sunk Cost

D. Internal Cost

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Pollution is an external cost because the burden is borne by society, not directly reflected in the company's internal financial books.

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

Question #3

The 'Accounting Voucher' is prepared on the basis of:

A. Final accounts

B. Supporting vouchers

C. Ledger accounts

D. Trial balance

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Accounting vouchers (debit/credit/transfer) are prepared from source documents.

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

Explore All Accountancy and Book Keeping MCQs