The 'Statement of Changes in Equity' shows: MCQ with Answer and Explanation

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The 'Statement of Changes in Equity' shows:

A. Cash flows

B. Changes in assets

C. Changes in liabilities

D. Changes in owners' equity during the period

Answer: Option D

Solution (By JKSSB Mock Tests)

It reconciles opening and closing equity, showing profit/loss, other comprehensive income, transactions with owners.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

If a purchase of ₹5,000 is posted as ₹500 in the ledger, it is an error of:

A. Principle

B. Commission

C. Compensating

D. Omission

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Correct Answer: Option B

Explanation:
Error of commission is when a wrong amount is posted to the correct account.

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

Question #2

In journal, a compound entry involves:

A. Only two accounts

B. Only nominal accounts

C. More than one debit or more than one credit

D. One debit and one credit only

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Correct Answer: Option C

Explanation:
A compound journal entry has more than one debit or more than one credit, affecting multiple accounts.

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Question #3

If the current ratio is 2:1, which of the following transactions will increase the ratio?

A. Sold goods on credit

B. Purchased goods on credit

C. Issued debentures

D. Paid cash to creditors

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Correct Answer: Option A

Explanation:
Selling goods on credit increases current assets (debtors) without affecting current liabilities, thereby increasing a current ratio that is already greater than 1.

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

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