1.Which of the following is not an accounting equation?

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1 capital = Profit + Stock+ Cash
2 Capital = Assets - Liabilities
3 Assets = Capital + Liabilities
4 Liabilities = Assets - Capital
2.A business has assets of Rs.40000 and liabilities of Rs.13,000. What is the am
ount of capital ?
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1 27,000
2 53,000
3 28,000
4 None of the above\
3.Altd purchased goods for $ 50000 and incurred Rs 10000 as expenses. Salary per
month is Rs. 500. During the first three months sold 75% of the goods at profit
of 25% on cost. :
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1 11531
2 12530
3 11000
4 11350
4.Capital = 50,000; Networth = 85,000; Assets = 200,000. Find the missing item o
f the accounting equation
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1 Liabilities = 115,000
2 Liabilities = 65,000
3 Liabilities = 150,000
4 Liabilities = 50,000
5.Purchased goods on credit for Rs.70000. What will be the impact on Accounting
Equation ( Capital + Liabilities = Assets)?
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1 Increase in Assets and Increase in Liabilities
2 Increase in Capital and Increase in Liabilities
3 Increase in Assets and Increase in Capital
4 Increase in Cash and Increase in Capital
6.Purchased furniture on credit for Rs.10000. Which of the following statements
is correct with respect to accounting equation?
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1 Increase in one asset and Decrease borrowing/liabilities
2 Decrease in cash and increase in assets
3 Increase in furniture and decrease in capital
4 None of the above
7.Altd. raised Rs. 500,000 as capital and 12% loan of Rs.500000.. Invested all f
unds in the purchase and sale of shares of good companies. At the end of the yea
r the networth (capital +Profit) of the company was Rs. 600000. Which of the fol
lowing statements represents the correct state of affairs:
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1 Capital (500000) + Profits (100000) + Loans (500000) = Assets (1100000)
2 Owners fund (600000) +Loans (500000) = Assets (1100000
3 A & B
4 None of the above
8.Altd has the following transactions: Salary paid: Rs.12000 (per month Rs.4000)
, Rent paid: Rs. 24000 (Rent per month; 4000). Sold goods: Rs.50000. Other expen
ses per month: Rs2000. Find profit for the first three months:
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1 20000
2 12000
3 42000
4 none of the above
9.A stared business with 50,000; Purchased shares of X ltd.. Sold the shares at
the end of the month at Rs. 65000. Show the accounting equation at the end of th
e month.
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1 Capital (50000) + Profit (15000) = Cash 65000
2 Capital (65000) = Cash (65000)
3 Capital (50000) - Loss (15000) = Cash (35000)
4 Capital (50000) = Cash (50000)
10.A ltd. purchased scooter for the salesmen and also for his son. However, purc
hase of scooter for son will not recorded in the accounting equation due to:
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1 Money measurement concept
2 Business entity concept
3 Accrual concept
4 None of the above
11.A ltd. purchases shares of X ltd at a premium of 50% for cash. What will be t
he impact on the accounting equatiion of Altd.
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1 Cash Decreases and Investment Increases
2 Cash Decreases and Investement Decrease
3 Cash Increases and Investment Increases
4 Capital decreases and Profit Increase
12.At the beginning of the year A started business with 50,000 and Purchased pla
nt = 40,000 ( life 10 years); No production during the year. Rent paid: 3000. Sh
ow the accounting equation at the end of the year.
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1 Capital (50000) - Loss (7000) = Cash (7000) + Plant (36000)
2 Capital (50000) + Profit (7000) = Cash (7000) + Plant (36000)
3 Capital (50000) - Loss (7000) = Cash (36000) + Plant (7000)
4 Capital (50000) = Cash (7000) + Plant (43000)
13.Altd takes a loan (rate of interest is 12% per annum) and purchases goods for
$ 5000 on 1st April 2005. and incurred Rs 1000 as other expenses. During the ye
ar sold all goods for 10000. Profit earned is:
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1 3425
2 3850
3 3400
4 3000
14.A ltd purhchased plant at the cost of Rs. 25000. The market value of the plan
t is Rs. 300000 and the Altd expects to earn a profit of 50000 by using the plan
t. What plant value should be shown in the accounting equation?
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1 300,000
2 50,000
3 25,000
4 None of the above
15.A business has assets of Rs.44,312 and owners money Rs.13,210. What is the am
ount of liabilities ?
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1 31,102
2 57,522
3 44,312
4 None of the above
16.A stared business with 50,000; Purchased old books on credit = 50000; Purchas
ed shares for cash = 30,000; Sold all old books at a premium of 50%. Find Networ
th.
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1 75000
2 35,000
3 50,000
4 100,000
17.Altd purchased goods for $ 5000 and incurred Rs 1000 as expenses. Sold 75% of
the goods at profit of 20% on sales. Profit earned is:
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1 5625
2 5400
3 5250
4 none of the above
18.Purchase of raw materials on credit results in
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1 Increase in assets and increase in liability
2 Decrease in capital and increase in liability
3 Decrease in assets and increase in liability
4 Decrease in assets and decrease in liability
19.Assets of a business are Rs.21,315 and liabilities Rs.4,120. What is the amou
nt of owners money ?
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1 21315
2 17195
3 25435
4 4120
20.Which of the following is an accounting equation ?
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1 Capital=Assets -Liabilities
2 Assets = Liabilities + Capital
3 Only A
4 Both A & B
21.On 1st April Altd started business with cash $ 100,000. It availed 12% loan:
$ 50000. Used the entire money for buying shares of Google ltd. At the end of th
e six month 50% of the shares were sold at profit of 50%. Find the networth at t
he end of the one year.
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1 137,500
2 131,500
3 125,000
4 100,000
22.On 1st April Altd started business with cash 100,000. It availed 12% loan: 50
000. Used the entire money for buying shares of Google ltd. At the end of the si
x month 50% of the shares were sold at profit of 50%. Show the accounting equati
on at the end of 6 months.
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1 Capital( 100,000) + Loan( 50,000) + Profit (34500)= Shares (75000) + Cas
h (109,500)
2 Capital( 100,000) + Loan( 50,000)= Shares (150,000)
3 Capital( 100,000) + Loan( 50,000) + Profit (37500)= Cash (187500)
4 none of the above
23.Purchase of office equipment for cash results in
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1 Increase in equipments and decrease in cash
2 Increase in equipments and increase in loan
3 Increase in assets and decrease in profits
4 Increase in assets and increase in liabilities
24.Capital of Altd. Rs.15000. 12% Loan: Rs.50000. Sales during the year: 100,000
, Expenses (other than interest)= 45%. Show the accounting equation at the end o
f the year
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1 15,000 (capital) + 50,000(Loan) = 65000 (Cash)
2 15,000 (capital) + 50,000(Loan) +49000 (Profit)= 114,000 (Cash)
3 15,000 (capital) -49000 (loss)+ 50,000(Loan) = 16,000 (Cash)
4 None of the above
25.A stared business with 50,000; Purchased old books on credit from X = 50000;
Purchased shares for cash = 30,000; Sold all old books at a premium of 50%. Find
profit and cash in hand.
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1 Cash (75000); Profit (25000)
2 Cash (55000); Profit (25000)
3 Cash (25000); Profit (75000)
4 Cash (50000); Profit (50000)
26.Capital = Rs.50000, Loan = 100000, FA = 50000, Investments = 20000 Stock = 80
000. During the month 50% of the stock sold at a profit of 20% on sales. Which o
f the following is correct reflection of the accounting equation
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1 50000 (Cap)+ 100000 (loan)+10000 (profit) = 50000 (FA) + 20000 (Inv)+ 40
000 (Stock) + 50000 (Cash)
2 160000 (sources) = 160000 (assets)
3 160000 (sources) = 50000 (cash) + 110,000 (other Assets)
4 All of the above
27.Capital of Altd. Rs.15000. 12% Loan: Rs.50000. Show the accounting equation a
t the end of the year assuming no sales during the year
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1 15,000 (capital) - 6000 (loss)+ 6000 (Interest Outstanding)+ 50,000(Loan
) = 65,000 (Cash)
2 15,000 (capital) + 50,000(Loan) - 6000 (loss)= 59,000 (Cash)
3 1 and 2
4 None of the above
28.Which of the following statements is correct with respect to the impact of de
preciation on plant on the accounting equation?
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1 Networth + Liabilities = Assets
2 Networth = Assets Liabilities
3 Capital + Cash + Loan = Assets
4 Capital + Profit + Loan = Assets
29.A stared business with 50,000; Purchased old books on credit = 50000; Purchas
ed shares for cash = 30,000; Sold all old books at a premium of 50%. Find Networ
th.
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1 Capital (50000) + Profit (25000) + X (50000)= Cash (95000) +Shares (3000
0)
2 Capital (50000) + Profit (25000) + X (50000)= Cash (75000) +Shares (3000
0)
3 Capital (100000) + Profit (25000) = Cash (95000) +Shares (30000)
4 Capital (75000) + X (50000)= Cash (95000) +Shares (30000)