Interactive workbook: Multiple-choice-questions 2.3 - Introduction to Accounting 2e Student Resources

. Abi Limited buys a building with a long-term bank loan. What effects does this transaction have on the balances in the statement of financial position?

Increase property, plant and equipment, increase long-term borrowings

Decrease property, plant and equipment, increase long-term borrowings

Increase property, plant and equipment, decrease long-term borrowings

Decrease property, plant and equipment, decrease long-term borrowings

. Bhavna Plc repays a trade payable with a payment from the bank. Bhavna's bank account currently holds sufficient cash to meet the payment without the company's bank account going overdrawn. What are the effects of this transaction on the balances in the statement of financial position?

Increase cash and cash equivalents, increase trade payables

Increase cash and cash equivalents, decrease trade payables

Decrease cash and cash equivalents, increase trade payables

Decrease cash and cash equivalents, decrease trade payables

. One of Charles Limited's trade receivables pays what is owed in cash. What are the effects of this transaction on the balances in Charles Limited's statement of financial position?

Increase cash and cash equivalents, increase trade receivables

Increase cash and cash equivalents, decrease trade receivables

Decrease cash and cash equivalents, increase trade receivables

Decrease cash and cash equivalents, decrease trade receivables

. David Plc issues new £1 shares for cash. What are the effects of this transaction on the balances in David Plc's statement of financial position?

Increase cash and cash equivalents, increase issued share capital

Increase cash and cash equivalents, decrease issued share capital

Decrease cash and cash equivalents, increase issued share capital

Decrease cash and cash equivalents, decrease issued share capital

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