1. Which of the following is NOT an example of additional capital? A sole proprietor purchases a car through the bank account of the entity A sole proprietor brings a second-hand computer from his home to the office A sole proprietor transfers Php1,000 from his own bank account to the entity’s account A sole proprietor uses his own building as an office without receiving any rent 2. Which of the following is NOT an example of non-current assets? A second-hand computer used in office A van that is purchased through installments the total amount of which is not fully settled P40,000 cash A building bought by the entity 3. Suppose a debtor repays his debt of P50,000 by transferring the money into the bank account of the business. The effect of the transaction on the accounting equation would be: Both assets and liabilities increase by P50,000 Both assets and liabilities decrease by P50,000 Only assets decrease by P50,000 Assets and liabilities remain unchanged. 4. Which of the following transactions affects the total value of liabilities of a firm? Office equipment bought on credit Interest received from bank Goods purchased from suppliers by cash Goods sold to customers on credit 5. It refers to the process of transferring the debit and credit amounts from journals to ledger accounts Transferring Posting Closing Balancing off

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Description: 1. Which of the following is NOT an example of additional capital? A sole proprietor purchases a car through the bank account of the entity A sole proprietor brings a second-hand computer from his home to the office A sole proprietor transfers Php1,0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Which of the following is NOT an example of additional capital?

A sole proprietor purchases a car through the bank account of the entity

A sole proprietor brings a second-hand computer from his home to the office

A sole proprietor transfers Php1,000 from his own bank account to the entity’s account

A sole proprietor uses his own building as an office without receiving any rent

Which of the following is NOT an example of non-current assets?

A second-hand computer used in office

A van that is purchased through installments the total amount of which is not fully settled

P40,000 cash

A building bought by the entity

Suppose a debtor repays his debt of P50,000 by transferring the money into the bank account of the business. The effect of the transaction on the accounting equation would be:

Both assets and liabilities increase by P50,000

Both assets and liabilities decrease by P50,000

Only assets decrease by P50,000

Assets and liabilities remain unchanged.

Which of the following transactions affects the total value of liabilities of a firm?

Office equipment bought on credit

Interest received from bank

Goods purchased from suppliers by cash

Goods sold to customers on credit

It refers to the process of transferring the debit and credit amounts from journals to ledger accounts

Transferring

Posting

Closing

Balancing off

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