Which transaction will increase an asset and decrease another asset, keeping the accounting equation unchanged? MCQ with Answer and Explanation

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Which transaction will increase an asset and decrease another asset, keeping the accounting equation unchanged?

A. Payment to a creditor

B. Introduction of capital

C. Goods purchased on credit

D. Purchase of machinery for cash

Answer: Option D

Solution (By JKSSB Mock Tests)

Purchasing machinery for cash increases the Machinery asset and decreases the Cash asset by the same amount.

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

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Question #1

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The 'Fringe Benefit Tax' (FBT) was abolished in India from:

A. Assessment Year 2005-06

B. Never existed

C. Assessment Year 2010-11

D. Still in force

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Correct Answer: Option C

Explanation:
FBT was introduced in 2005 and abolished from AY 2010-11.

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Question #2

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The 'Stratified Sampling' in audit:

A. Divides the population into homogeneous subgroups and selects samples from each

B. Selects all high-value items

C. Selects items randomly

D. Ignores low-value items

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Correct Answer: Option A

Explanation:
Stratification improves audit efficiency by grouping items with similar characteristics.

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Question #3

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Which of the following deductions is not allowed under the new income tax regime (default)?

A. Section 24(b) interest on housing loan (let-out property)

B. Section 80CCD(2) (employer contribution to NPS)

C. Standard deduction on salary

D. Section 80C (PPF, LIC, etc.)

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Correct Answer: Option D

Explanation:
Under the new regime, Section 80C deductions are not allowed.

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

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