Which of the following is the Accounting equation ? (A) Capital = Assets – Liabilities (B) Capital = Assets + Liabilities (C) Assets = Liabilities – Capital (D) Liabilities = Assets – Capital

Which of the following is the Accounting equation ? (A) Capital = Assets – Liabilities (B) Capital = Assets + Liabilities (C) Assets = Liabilities – Capital (D) Liabilities = Assets – Capital  
by

1 Answer

Answer :

Answer: Capital = Assets – Liabilities
by
selected by

Related questions

According to Balance Sheet equation concept, the capital will be– (A) Capital = Liabilities – Assets (B) Capital = Fixed Assets – Current Assests (C) Capital = Assets – Liabilities (D) Capital = Assets + Liabilities

Description : According to Balance Sheet equation concept, the capital will be– (A) Capital = Liabilities – Assets (B) Capital = Fixed Assets – Current Assests (C) Capital = Assets – Liabilities (D) Capital = Assets + Liabilities

Last Answer : Answer: Capital = Assets – Liabilities

Which among the following is the societal obligation of accounting ? (A) To ascertain profit correctly (B) To maintain the records of the assets and liabilities of organisation (C) To establish effective organizational control (D) To be helpful in correct tax assessment

Description : Which among the following is the societal obligation of accounting ? (A) To ascertain profit correctly (B) To maintain the records of the assets and liabilities of organisation (C) To establish effective organizational control (D) To be helpful in correct tax assessment

Last Answer : Answer: To be helpful in correct tax assessment

Indian Accounting Standard – 28 is related to– (A) Accounting for taxes on income (B) Financial Reporting of Interests in Joint Venture (C) Impairment of Assets (D) Provisions, Contingent Liabilities and Contingent Assets

Description : Indian Accounting Standard – 28 is related to– (A) Accounting for taxes on income (B) Financial Reporting of Interests in Joint Venture (C) Impairment of Assets (D) Provisions, Contingent Liabilities and Contingent Assets

Last Answer : Answer: Impairment of Assets

The fundamental accounting equation' Assets = Liabilities + Capital' is the formal expression of A. Dual aspect concept B. Matching concept C. Going concern concept D. Money measurement concept

Description : The fundamental accounting equation' Assets = Liabilities + Capital' is the formal expression of A. Dual aspect concept B. Matching concept C. Going concern concept D. Money measurement concept

Last Answer : A. Dual aspect concept

Which of the following accounting equation is correct? A. Capital + Liabilities= Assets B. Capital = Assets + Liabilities C. Capital- Liabilities = Assets D. Capital + Assets = Liabilities

Description : Which of the following accounting equation is correct? A. Capital + Liabilities= Assets B. Capital = Assets + Liabilities C. Capital- Liabilities = Assets D. Capital + Assets = Liabilities

Last Answer : A. Capital + Liabilities= Assets

The current ratio is 3 : 2 and the amount of current liabilities is Rs. 40,000. What is the amount of current assets ? (A) Rs. 60,000 (B) Rs. 70,000 (C) Rs. 80,000 (D) Rs. 1,00,000

Description : The current ratio is 3 : 2 and the amount of current liabilities is Rs. 40,000. What is the amount of current assets ? (A) Rs. 60,000 (B) Rs. 70,000 (C) Rs. 80,000 (D) Rs. 1,00,000

Last Answer : Answer: Rs. 60,000

Donations received for the special purpose will be taken to the– (A) Income and Expenditure Account (B) Assets side of the Balance Sheet (C) Liabilities side of the Balance Sheet (D) Receipts and Payments Account

Description : Donations received for the special purpose will be taken to the– (A) Income and Expenditure Account (B) Assets side of the Balance Sheet (C) Liabilities side of the Balance Sheet (D) Receipts and Payments Account

Last Answer : Answer: Liabilities side of the Balance Sheet

In common size Balance Sheet analysis we evaluate– (A) Increase or decrease over two years is analysed (B) Only increase over two years is analysed (C) Only decrease over two years is analysed (D) All assets and liabilities are expressed in terms of percentage of total

Description : In common size Balance Sheet analysis we evaluate– (A) Increase or decrease over two years is analysed (B) Only increase over two years is analysed (C) Only decrease over two years is analysed (D) All assets and liabilities are expressed in terms of percentage of total

Last Answer : Answer: All assets and liabilities are expressed in terms of percentage of total

In financial accounting of a chemical plant, which of the following relationship is invalid? (A) Assets = equities (B) Assets = liabilities + net worth (C) Total income = costs + profits (D) Assets = capital

Description : In financial accounting of a chemical plant, which of the following relationship is invalid? (A) Assets = equities (B) Assets = liabilities + net worth (C) Total income = costs + profits (D) Assets = capital

Last Answer : (D) Assets = capital

Accounting for Intangible Assets are related to– (A) AS - 10 (B) AS - 12 (C) AS - 24 (D) AS - 26

Description : Accounting for Intangible Assets are related to– (A) AS - 10 (B) AS - 12 (C) AS - 24 (D) AS - 26

Last Answer : Answer: AS - 26

On the admission of a partner, fictitious assets are– (A) Transferred to Revaluation Account (B) Transferred to Capital Account (C) Transferred to Reserves (D) Shown in the new Balance Sheet

Description : On the admission of a partner, fictitious assets are– (A) Transferred to Revaluation Account (B) Transferred to Capital Account (C) Transferred to Reserves (D) Shown in the new Balance Sheet

Last Answer : Answer: Transferred to Revaluation Account

For the purpose of preparation of fund flow statement, fund means– (A) Total resources (B) Cash/bank balances (C) Current Assets (D) Working capital

Description : For the purpose of preparation of fund flow statement, fund means– (A) Total resources (B) Cash/bank balances (C) Current Assets (D) Working capital

Last Answer : Answer: Working capital

Government grants related to income as per the Accounting Standard (AS)-12 should be– (A) Presented as a credit in the statement of Profit and Loss (B) Presented as a deferred income on the asset side of the balance sheet (C) Presented as a capital grant on the liability side of balance sheet (D) Presented both in the Profit and Loss statement and in the balance sheet

Description : Government grants related to income as per the Accounting Standard (AS)-12 should be- (A) Presented as a credit in the statement of Profit and Loss (B) Presented as a deferred income on the asset ... of balance sheet (D) Presented both in the Profit and Loss statement and in the balance sheet

Last Answer : Answer: Presented both in the Profit and Loss statement and in the balance sheet

The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

Description : The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

Last Answer : b. liquidity.

Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the next accounting period starts. c. in order to transfer net income (or loss) and dividends to the retained earnings account. d. so that financial statements can be prepared.

Description : Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the ... ) and dividends to the retained earnings account. d. so that financial statements can be prepared.

Last Answer : c. in order to transfer net income (or loss) and dividends to the retained earnings account. unt.

Which of the following statement is correct? A. Fixed assets must always be shown at market value B. Book-keeping and accounting are different terms C. Owner's Equity = Assets + Liabilities D. Patents is an example of current asset

Description : Which of the following statement is correct? A. Fixed assets must always be shown at market value B. Book-keeping and accounting are different terms C. Owner's Equity = Assets + Liabilities D. Patents is an example of current asset

Last Answer : A. Fixed assets must always be shown at market value

Which statement is true? 1) The balance of payments depends on the principle of double-entry accounting. 2) Decrease in assets and increase in liabilities of net worth represent credits or sources of funds. 3) The balance of payment is a source- and uses of funds statement that reflects changes in assets, liabilities and net worth during a specified period of time. A. Only 1 B. Only 2 C. Only 3 D. 1, 2 and 3

Description : Which statement is true? 1) The balance of payments depends on the principle of double-entry accounting. 2) Decrease in assets and increase in liabilities of net worth represent credits or sources of funds. 3) The balance of ... period of time. A. Only 1 B. Only 2 C. Only 3 D. 1, 2 and 3

Last Answer : D. 1, 2 and 3

Which of the following methods are used in creative accounting? (a) Off balance sheet financing (b) Abuses of accounting concepts and conventions (c) Manipulating assets and liabilities (d) Over and under valuation of inventories

Description : Which of the following methods are used in creative accounting? (a) Off balance sheet financing (b) Abuses of accounting concepts and conventions (c) Manipulating assets and liabilities (d) Over and under valuation of inventories

Last Answer : A. OFF BALANCE SHEET FINANCING

“The position of a Company Secretary is like that of a hub in a bicycle wheel.” This statement shows the– (A) Importance of Company Secretary (B) Rights of Company Secretary (C) Duties of Company Secretary (D) Liabilities of Company Secretary

Description : “The position of a Company Secretary is like that of a hub in a bicycle wheel.” This statement shows the– (A) Importance of Company Secretary (B) Rights of Company Secretary (C) Duties of Company Secretary (D) Liabilities of Company Secretary

Last Answer : Answer: Importance of Company Secretary

State whether the following statement are true or false with reason : Capital = Liabilities – Assets.

Description : State whether the following statement are true or false with reason : Capital = Liabilities – Assets.

Last Answer : State whether the following statement are true or false with reason : Capital = Liabilities – Assets.

Which of the following is defined as the difference between current assets and current liabilities? A. Venture Capital B. Working Capital C. Equitable Mortgage D. None of the Above

Description : Which of the following is defined as the difference between current assets and current liabilities? A. Venture Capital B. Working Capital C. Equitable Mortgage D. None of the Above

Last Answer : B. Working Capital Explanation: The capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.

Net working capital refers to A. total assets minus fixed assets B. current assets minus current liabilities C. current assets minus inventories D. current

Description : Net working capital refers to A. total assets minus fixed assets B. current assets minus current liabilities C. current assets minus inventories D. current

Last Answer : B. current assets minus current liabilities

Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account for over half of its total assets. C. Strict adherence to the maturity matching approach to financing wD. Similar to the capital structure management, working capital management requires the financial manager to make a decision and not address the issue again for several months.ould call for all current assets to be financed solely with current liabilities.

Description : Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account ... the financial manager to make a decision and not address the issue again for several months.

Last Answer : B. Current assets of the typical manufacturing firm account for over half of its total assets.

To financial analysts, "working capital" means the same thing as . A. Total assets B. fixed assets C. current assets D. current assets minus current liabilities.

Description : To financial analysts, "working capital" means the same thing as . A. Total assets B. fixed assets C. current assets D. current assets minus current liabilities.

Last Answer : C. current assets

Which of the following illustrates the use of a hedging approach to financing assets? A. Temporary current assets financed with long-term liabilities. B. Permanent working capital financed with long-term liabilities. C. Short-term assets financed with equity D. All assets financed with a mixture of 50% equity and 50% long-term debt

Description : Which of the following illustrates the use of a hedging approach to financing assets? A. Temporary current assets financed with long-term liabilities. B. Permanent working capital financed with long-term ... equity D. All assets financed with a mixture of 50% equity and 50% long-term debt

Last Answer : B. Permanent working capital financed with long-term liabilities.

The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities. (A) Cash ratio (B) Net working capital (C) Current ratio

Description : The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities. (A) Cash ratio (B) Net working capital (C) Current ratio

Last Answer : (B) Net working capital

Which of the following is an important fact about working capital in Capsim? a. The life blood of any organization b. All of the money tied up in things you one day wish to sell c. Can be seen on the balance sheet under the headings current assets and current liabilities d. The change of working capital can be seen on the cash flow statement e. All of the above are important

Description : Which of the following is an important fact about working capital in Capsim? a. The life blood of any organization b. All of the money tied up in things you one day wish to sell c. Can be ... The change of working capital can be seen on the cash flow statement e. All of the above are important

Last Answer : e. All of the above are important

Gross assets are Rs.1,01,000, fictitious assets Rs.350 are included in the gross assets. External liabilities are Rs.7,500. 6% prefer share capital is Rs.45,000. Equity capital is 4,500 equity shares of Rs.10 each fully paid. Average expected profit is Rs.8,500. Transfer to reserves is 10%. Pref. dividend is payable. NRR is 9%. The Net Asset Value Per share is A Rs.11 B Rs.10.70 C Rs.15 D Rs.20s

Description : Gross assets are Rs.1,01,000, fictitious assets Rs.350 are included in the gross assets. External liabilities are Rs.7,500. 6% prefer share capital is Rs.45,000. Equity capital is 4,500 equity shares of Rs.10 each fully ... . The Net Asset Value Per share is A Rs.11 B Rs.10.70 C Rs.15 D Rs.20

Last Answer : Rs.10.70

Matching concept means A] Assets = capital + liabilities B] Transactions recorded at accrual concept C] Anticipate no profit but recognize all losses D] Expenses should be matched with the revenue of the period.Matching concept means A] Assets = capital + liabilities B] Transactions recorded at accrual concept C] Anticipate no profit but recognize all losses D] Expenses should be matched with the revenue of the period.

Description : Matching concept means A] Assets = capital + liabilities B] Transactions recorded at accrual concept C] Anticipate no profit but recognize all losses D] Expenses should be matched with the revenue of the period.

Last Answer : D] Expenses should be matched with the revenue of the period.

Fixed assets are double the current assets and half the capital. The current assets are Rs.3,00,000 andinvestments are Rs.4,00,000. Then the current liabilities recorded in balance sheet will be a) 2,00,000 b) 1,00,000 c) 3,00,000 d) 4,00,000

Description : Fixed assets are double the current assets and half the capital. The current assets are Rs.3,00,000 andinvestments are Rs.4,00,000. Then the current liabilities recorded in balance sheet will be a) 2,00,000 b) 1,00,000 c) 3,00,000 d) 4,00,000

Last Answer : b) 1,00,000

Unpaid calls are shown in the balance sheet of a company A. By adding it to the share capital B. By deducting it from the called-up share capital C. Under the head 'current assets' D. Under the head 'current liabilities'

Description : Unpaid calls are shown in the balance sheet of a company A. By adding it to the share capital B. By deducting it from the called-up share capital C. Under the head 'current assets' D. Under the head 'curent liabilities'

Last Answer : B. By deducting it from the called-up share capital

Which one of the following is an example of sources of funds? A. Decrease in share capital B. Increase in long-term liabilities C. Decrease in long-term liabilities D. Increase in fixed assets

Description : Which one of the following is an example of sources of funds? A. Decrease in share capital B. Increase in long-term liabilities C. Decrease in long-term liabilities D. Increase in fixed assets

Last Answer : B. Increase in long-term liabilities

Current liabilities are equals to------------------------------- a) Working capital +current assets b) Working capital-current assets c) Current assets-working capital d) Current asset + working capital

Description : Current liabilities are equals to------------------------------- a) Working capital +current assets b) Working capital-current assets c) Current assets-working capital d) Current asset + working capital

Last Answer : c) Current assets-working capital

Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be------------------------- a) No change in working capital b) Decrease of working capital by Rs.80,000 c) Increase of working capital by Rs.40,000 d) None of these

Description : Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be------------------------- a) No change in working ... Decrease of working capital by Rs.80,000 c) Increase of working capital by Rs.40,000 d) None of these

Last Answer : a) No change in working capital

Working capital is expressed as------ a) Current asset-fixed asset b) Fixed assets-current liabilities c) Current assets-current liabilities d) None of these

Description : Working capital is expressed as------ a) Current asset-fixed asset b) Fixed assets-current liabilities c) Current assets-current liabilities d) None of these

Last Answer : c) Current assets-current liabilities

Net capital employed is equal to --------------- a) Total assets minus liabilities b) Fixed asset plus net working capital c) Total asset minus long-term liabilities d) Total assets

Description : Net capital employed is equal to --------------- a) Total assets minus liabilities b) Fixed asset plus net working capital c) Total asset minus long-term liabilities d) Total assets

Last Answer : b) Fixed asset plus net working capital

When an incoming partner purchases his share from any one of the existing partners, then– (A) total assets of the firm do not change (B) total assets of the firm will be augmented to the extent of payment received from the new partner (C) total assets of the firm will be reduced to the extent of payment received from the new partner (D) change in total assets of the firm will depend upon the new profit sharing ratio of the partners

Description : When an incoming partner purchases his share from any one of the existing partners, then- (A) total assets of the firm do not change (B) total assets of the firm will be augmented to the extent ... ) change in total assets of the firm will depend upon the new profit sharing ratio of the partners

Last Answer : Answer: total assets of the firm do not change

Which one of the following ratios is likely to be affected the most on account of price level changes ? (A) Current Ratio (B) Inventory Turnover Ratio (C) Debtors’ Turnover Ratio (D) Fixed Assets Turnover Ratio

Description : Which one of the following ratios is likely to be affected the most on account of price level changes ? (A) Current Ratio (B) Inventory Turnover Ratio (C) Debtors’ Turnover Ratio (D) Fixed Assets Turnover Ratio

Last Answer : Answer: Debtors’ Turnover Ratio

A limited company makes a net profit of Rs. 2,00,000 after writing off preliminary expenses amounting to Rs. 20,000 and providing for depreciation on assets amounting to Rs. 40,000 and gain of Rs. 10,000 on sale of a piece of machinery. What are the funds from operation ? (A) Rs. 2,00,000 (B) Rs. 2,40,000 (C) Rs. 2,50,000 (D) Rs. 2,60,000

Description : A limited company makes a net profit of Rs. 2,00,000 after writing off preliminary expenses amounting to Rs. 20,000 and providing for depreciation on assets amounting to Rs. 40,000 and gain of Rs. 10,000 on sale of a piece of ... 2,00,000 (B) Rs. 2,40,000 (C) Rs. 2,50,000 (D) Rs. 2,60,000

Last Answer : Answer: Rs. 2,50,000

The primary function of an office is– (A) Making, using and preserving records (B) Remunerating personnel (C) Carrying out management policies (D) Safeguarding organization’s assets

Description : The primary function of an office is– (A) Making, using and preserving records (B) Remunerating personnel (C) Carrying out management policies (D) Safeguarding organization’s assets

Last Answer : Answer: Making, using and preserving records

Goodwill, Copyright and Trademarks should be classified as– (A) Tangible assets (B) Intangible assets (C) Current assets (D) Fictitious assets

Description : Goodwill, Copyright and Trademarks should be classified as– (A) Tangible assets (B) Intangible assets (C) Current assets (D) Fictitious assets

Last Answer : Answer: Intangible assets

The following data, relates to manufacturing company for the year 2006-07– Net Profit as per P & L A/c–Rs. 2,40,000; Depreciation–Rs. 80,000; Goodwill written-off– Rs. 40,000, Profit on Sale of Fixed Assets–Rs. 16,000, Proposed Dividend–Rs. 96,000. The fund from operation would be– (A) Rs. 4,40,000 (B) Rs. 4,00,000 (C) Rs. 6,40,000 (D) None of the above

Description : The following data, relates to manufacturing company for the year 2006-07- Net Profit as per P & L A/c-Rs. 2,40,000; Depreciation-Rs. 80,000; Goodwill written-off- Rs. 40,000, Profit on Sale of Fixed Assets-Rs. 16,000, ... ) Rs. 4,40,000 (B) Rs. 4,00,000 (C) Rs. 6,40,000 (D) None of the above

Last Answer : Answer: None of the above

Which audit is carried out during the accounting period with some interval, it is called– (A) periodic audit (B) partial audit (C) continuous audit (D) interim audit

Description : Which audit is carried out during the accounting period with some interval, it is called– (A) periodic audit (B) partial audit (C) continuous audit (D) interim audit

Last Answer : Answer: continuous audit

In an office, Franking machine is used for– (A) Punching card (B) Accounting work (C) Duplicating (D) Postal stamp fixing

Description : In an office, Franking machine is used for– (A) Punching card (B) Accounting work (C) Duplicating (D) Postal stamp fixing

Last Answer : Answer: Postal stamp fixing

According to the Accounting Standard (AS)-2, the inventory is to be valued at which one of the following ? (A) Actual cost or sales value, whichever is lower (B) Historical cost (C) Net realizable value (D) Historical cost or net realizable value, whichever is lower

Description : According to the Accounting Standard (AS)-2, the inventory is to be valued at which one of the following ? (A) Actual cost or sales value, whichever is lower (B) Historical cost (C) Net realizable value (D) Historical cost or net realizable value, whichever is lower

Last Answer : Answer: Historical cost or net realizable value, whichever is lower

Which of the following is affected by treatment of an accrued item in accounting ? (A) Profit and Loss A/c only (B) Profit and Loss Appropriation A/c (C) Balance Sheet only (D) Profit and Loss A/c and Balance Sheet

Description : Which of the following is affected by treatment of an accrued item in accounting ? (A) Profit and Loss A/c only (B) Profit and Loss Appropriation A/c (C) Balance Sheet only (D) Profit and Loss A/c and Balance Sheet

Last Answer : Answer: Profit and Loss A/c and Balance Sheet

Expenses need to be recorded in the period in which the associated revenues are recognised. This is to be ensured as per which one of the following accounting principles ? (A) Revenue recognition (B) Cost benefit (C) Matching (D) Periodicity

Description : Expenses need to be recorded in the period in which the associated revenues are recognised. This is to be ensured as per which one of the following accounting principles ? (A) Revenue recognition (B) Cost benefit (C) Matching (D) Periodicity

Last Answer : Answer: Revenue recognition

Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis of accounting only (B) Financial statements should be prepared according to the accrual basis of accounting only (C) Financial statements should be prepared according to either the cash basis or accrual basis of accounting (D) Financial statements should be prepared according to both the accrual and cash basis of accounting

Description : Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis ... Financial statements should be prepared according to both the accrual and cash basis of accounting

Last Answer : Answer: Financial statements should be prepared according to the accrual basis of accounting only

What is a systematic evaluation of a company's activities in a given area of social interest such as environmental protection, workplace safety or community involvement, called ? (A) Social responsibility (B) Social accounting (C) Social audit (D) Social forecasting

Description : What is a systematic evaluation of a company's activities in a given area of social interest such as environmental protection, workplace safety or community involvement, called ? (A) Social responsibility (B) Social accounting (C) Social audit (D) Social forecasting

Last Answer : Answer: Social audit

The Branch of Accounting which is concerned with the processing and presenting data for decision making is known as– (A) Common Dollar Accounting (B) Social Accounting (C) Cost Accounting (D) Management Accounting

Description : The Branch of Accounting which is concerned with the processing and presenting data for decision making is known as– (A) Common Dollar Accounting (B) Social Accounting (C) Cost Accounting (D) Management Accounting

Last Answer : Answer: Management Accounting