Answered: Ali, the owner of the business…

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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Ali, the owner of the business purchased Furniture for RO 10, 000 to be used in the business. The manager estimates the value of the Furniture to be RO 11,000 in the market. If the Business follows Historical Cost concept, the amount to be recorded for Furniture is a. RO 11,000 b. RO 1000 c. RO 21,000 d. RO 10,000 Which of the following transactions would increase the cash by RO 5000 and increase the revenue by RO 5000? a. Paid RO 5000 for the creditors b. Performed service to the customer RO 5000 and the customer paid cash RO 5000 c. Purchased Furniture RO 5000 d. Took Loan of RO 5000 from Bank Nizwa Ms. Nihal started her business by investing RO 30,000 in cash. This transaction would? a. increase one asset and decrease another asset b. decrease assets and decrease liabilities c. increase assets and increase equity d. increase assets and increase liabilities Which of the following transactions would decrease asset by RO 2000 and increase expense by RO 2000 a. The business borrowed loan of RO 2000 b. The business paid the utilities expense RO 2000 c. The business Purchased computer RO 2000 to be used in the business. d. The business sold the goods and received cash RO 2000 Which of the following transactions would decrease the cash by RO 5000 and decrease liability 5000? a. The business gave loan of RO 5000 b. the business repaid the loan of RO 5000 which was borrowed in the last month c. the business sold goods to the customer worth RO 5000 and the customer promised to pay later d. The business borrowed loan of RO 5000 Ali purchased equipment on credit. What is the effect of this transaction? a. decrease assets and decrease liabilities b. increase assets and increase equity c. increase assets and increase liabilities d. increase one asset and decrease another asset Which of the following accounts will get affected when cash is received from sale made on account in the last month? a. Cash and Service Revenue b. Cash and Notes Payable c. Cash and Salary Expense d. Cash and Accounts Receivable The business owner purchases Equipment by paying cash to use in the business. Which among the following entry is correct entry a. Dr: Equipment, Cr: Payable b. Dr: Cash, Cr: Equipment c. Dr: Payable, Cr: Equipment d. Dr: Equipment, Cr: Cash

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