Accounting Multiple Choice Question – 24 January 2024

Alex the owner of Alex Trading increased his business’s total number of motor vehicles by adding his own car to the fleet for exclusive use by the business.

Which elements of the accounting equation will change due to this transaction?

Select ONE answer:

1. Assets only
2. Capital only
3. Assets and capital
4. Assets and 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 3

1. Not correct
2. Not correct
3. Correct – The car increases assets while it is treated as capital introduced to Alex trading rather than as a liability of the business to its proprietor.
4. Not correct

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