PRC-1 · Chapter 1 · Question 72 of 100
If 'Crest Furniture' issues a cheque of Rs. 50,000 to fully settle a balance owed to a timber supplier, what is the immediate impact on the total assets of the business?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Total assets will decrease.
Explanation
Paying a supplier via cheque reduces the business's bank balance, causing an immediate decrease in total assets. It simultaneously decreases total liabilities.
More Accounting Basics MCQs
- Q74According to the conceptual framework, 'Income' arises during an accounting period from an increase in assets or a decrease in a liability…
- Q75Based on the dual-aspect concept, if a transaction results in a decrease in an asset, which of the following might be the corresponding…
- Q76'Omega Corp' records a transaction that debits a consulting expense for Rs. 100,000 and credits accounts payable for Rs. 100,000. What is…
- Q77Which of the following statements provides the most accurate definition of a 'Current Asset'?
- Q78Which of the following items found in a trial balance would definitely be classified as a 'Non-Current Liability' in the statement of…