When a business receives money from one of its debtors by cheque, the impact on its assets and / or liabilities is:
Select ONE answer:
- Effect upon Assets – Decrease bank / Effect upon Liabilities – Decrease creditors
- Effect upon Assets – Increase bank / Effect upon Liabilities – Decrease debtors
- Effect upon Assets – Increase cash / Effect upon Liabilities – Decrease loan
- Effect upon Assets – Increase stock / Effect upon Liabilities – Decrease capital
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This is multiple choice question is suitable for Accounting KS5 classes.
The answer is 2 – As a result of the business receiving money from one of its debtors by cheque, it has more money that in previously had in its bank account and is owed less than it previously was by its debtors.
This work is licensed under a Creative Commons Attribution 4.0 International License.
