1. The liabilities of a business are Rs. 30,000; the capital of the proprietor is Rs. 70,000. The total assets are?

A) Rs.70,000
B) Rs. 30,000
C) Rs.40,000
D) None of the Above



2. Which of the following account is affected from the drawings of cash in sole-proprietorship business?

A) Shareholder account
B) Capital account
C) Liability account
D) Expense account



3. Which of the following accounts will be used in equation, if the goods are sold on credit to Mr. Mahmood?

A) Cash account and Ownerâ??s equity
B) Account Receivable and Ownerâ??s equity
C) Cash and Account Receivable
D) Account Payable and Ownerâ??s Equity



4. Which one of the following equations correctly expresses the relationship between assets (A), liabilities (L), revenues (R), expenses (E) and capital (C)?

A) A = L + R + E + C
B) A = C + L + (R-E)
C) A = C - (R - E) + L
D) A = (L - C) + (R - E)



5. The favorable balance of profit and loss account should be?

A) Added in liabilities
B) Subtracted from current assets
C) Subtracted from liabilities
D) Added in capital