Africa Traders is a business that sells furniture and equipment items to its customers. Africa Traders bought equipment for an amount of R25 000 from SA Dealers, which was financed through a bank overdraft from RAND Bank. Equipment was bought solely for the purpose of being used by Africa Traders. What will be the effect on the accounting equation? Select one: a. LIABILITIES = ASSETS - EQUITY Current: - R25 000 Non-current: - R25 000 R0 b. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 - R25 000 c. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 Current: - R25 000 R0 d. LIABILITIES = ASSETS - EQUITY Current: + R25 000 Non-current: + R25 000 R0
Africa Traders is a business that sells furniture and equipment items to its customers. Africa Traders bought equipment for an amount of R25 000 from SA Dealers, which was financed through a bank overdraft from RAND Bank. Equipment was bought solely for the purpose of being used by Africa Traders. What will be the effect on the accounting equation? Select one: a. LIABILITIES = ASSETS - EQUITY Current: - R25 000 Non-current: - R25 000 R0 b. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 - R25 000 c. LIABILITIES = ASSETS - EQUITY R0 Non-current: + R25 000 Current: - R25 000 R0 d. LIABILITIES = ASSETS - EQUITY Current: + R25 000 Non-current: + R25 000 R0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Africa Traders is a business that sells furniture and equipment items to its customers. Africa Traders bought equipment for an amount of R25 000 from SA Dealers, which was financed through a bank overdraft from RAND Bank. Equipment was bought solely for the purpose of being used by Africa Traders.
What will be the effect on the
Select one:
a.
|
LIABILITIES |
= ASSETS |
- EQUITY |
|
Current: - R25 000 |
Non-current: - R25 000 |
R0 |
b.
|
LIABILITIES |
= ASSETS |
- EQUITY |
|
R0 |
Non-current: + R25 000 |
- R25 000 |
c.
|
LIABILITIES |
= ASSETS |
- EQUITY |
|
R0 |
Non-current: + R25 000 Current: - R25 000 |
R0 |
d.
|
LIABILITIES |
= ASSETS |
- EQUITY |
|
Current: + R25 000 |
Non-current: + R25 000 |
R0 |
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