Payment of expenses will ______ the assets
Correct answer: B. Reduce
- A. Increase
- B. Reduce
- C. apportion
- D. Overstate
Explanation
Paying an expense usually involves paying cash, so assets decrease. The expense also reduces profit and therefore equity, but the question asks specifically about assets.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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351 free Accounting Principles MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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