Online Test — Recording of Transactions — Source Documents and the Accounting Equation
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
An economic event that changes the financial position and is measurable in money is a:
Transaction
Rumour
Plan
Quotation
Explanation: That is the definition of a business transaction.
Question 2 of 15
Goods sold for cash are supported by a:
Cash memo
Invoice
Pay-in slip
Credit note
Explanation: A cash sale is evidenced by a cash memo.
Question 3 of 15
A document prepared when goods are sold on credit is the:
Cash memo
Invoice/bill
Receipt
Cheque
Explanation: Credit sales use an invoice (the buyer calls it a bill).
Question 4 of 15
When a customer returns goods to us, we issue a:
Debit note
Credit note
Cash memo
Pay-in slip
Explanation: A credit note credits the customer's account on return of goods.
Question 5 of 15
A form used to deposit cash/cheque into a bank is a:
Pay-in slip
Cheque
Voucher
Invoice
Explanation: A pay-in slip accompanies deposits into the bank.
Question 6 of 15
A document prepared from a source document showing accounts to debit and credit is a:
Voucher
Ledger
Trial balance
Bill
Explanation: A voucher analyses a transaction into debit and credit.
Question 7 of 15
The accounting equation is:
Assets = Liabilities + Capital
Assets = Capital − Liabilities
Capital = Assets + Liabilities
Liabilities = Capital − Assets
Explanation: Assets = Liabilities + Capital.
Question 8 of 15
Capital equals:
Assets + Liabilities
Assets − Liabilities
Liabilities − Assets
Assets × Liabilities
Explanation: Capital = Assets − Liabilities.
Question 9 of 15
Debtors are an example of:
A liability
An asset
Capital
An expense
Explanation: Debtors (who owe us) are an asset.
Question 10 of 15
Buying furniture for cash:
Increases total assets
Decreases total assets
Keeps total assets unchanged
Increases capital
Explanation: One asset rises and another falls equally — total assets unchanged.
Question 11 of 15
Taking a bank loan of Rs 50,000:
Increases an asset and a liability by 50,000
Reduces capital
Reduces an asset
Has no effect
Explanation: Cash (asset) and loan (liability) both rise by 50,000.
Question 12 of 15
If assets are Rs 9,00,000 and liabilities Rs 4,00,000, capital is:
Rs 13,00,000
Rs 5,00,000
Rs 4,00,000
Rs 9,00,000
Explanation: Capital = 9,00,000 − 4,00,000 = 5,00,000.
Question 13 of 15
Selling goods costing Rs 20,000 for Rs 26,000 cash changes capital by:
+26,000
+6,000 (profit)
−20,000
0
Explanation: Profit of Rs 6,000 increases capital.
Question 14 of 15
Paying rent of Rs 3,000:
Increases capital
Decreases capital by 3,000
Increases a liability
Has no effect on capital
Explanation: An expense reduces capital (and cash) by Rs 3,000.
Question 15 of 15
Owner withdrawing cash for personal use is recorded as:
An expense
Drawings (reduces capital)
A liability
Revenue
Explanation: Drawings reduce the owner's capital.