Accounting Multiple Choice Question – 23 February 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which of the following pairs of events would increase the capital of a firm?

Select ONE answer:

  1. An increase in the firm’s fixed assets and a corresponding decrease in its current assets.
  2. An increase in the firm’s fixed assets and a corresponding increase in its liabilities.
  3. A decrease in the firm’s current assets and no change in its liabilities.
  4. An increase in the firm’s assets and a smaller increase in its liabilities.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 4

  • Capital = Assets – Liabilities

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