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We provide a comprehensive set of multiple-choice questions (MCQs) with answers to help you strengthen your understanding of the accounting equation. Whether you’re reviewing for exams or seeking additional practice, these MCQs cover essential concepts in accounting equation class 11. Download the Accounting equation class 11 mcq with answers PDF from Infinity Learn for convenient access to these valuable resources. Let’s dive into the world of accounting equations and enhance your knowledge with ease.
Accounting Equation Class 11 MCQ With Answers Pdf
Accounting Equation Class 11 MCQ With Answers
Q. What is the fundamental equation in accounting?
A) Assets = Liabilities – Equity
B) Assets = Liabilities + Equity
C) Assets – Liabilities = Equity
D) Liabilities = Assets + Equity
Answer: B) Assets = Liabilities + Equity
Q. In the accounting equation, assets are equal to:
A) Revenues – Expenses
B) Liabilities – Equity
C) Liabilities + Equity
D) None of the above
Answer: C) Liabilities + Equity
Q. If a company’s assets are $50,000 and its liabilities are $20,000, what is its equity?
A) $30,000
B) $70,000
C) $20,000
D) $50,000
Answer: A) $30,000
Q. What happens to the accounting equation if a company borrows $10,000 from a bank?
A) Assets increase by $10,000
B) Assets decrease by $10,000
C) Liabilities increase by $10,000
D) Equity increases by $10,000
Answer: C) Liabilities increase by $10,000
Q. Which of the following transactions would increase both assets and liabilities?
A) Purchasing inventory on credit
B) Selling inventory for cash
C) Paying off a bank loan
D) Receiving cash from customers
Answer: A) Purchasing inventory on credit
Q. If a company’s equity is $25,000 and its liabilities are $15,000, what are its assets?
A) $40,000
B) $10,000
C) $25,000
D) $15,000
Answer: A) $40,000
Also Read: Mole Concept Class 11 MCQs With Answer
Q. Which of the following transactions would decrease assets?
A) Borrowing money from a bank
B) Selling equipment for cash
C) Purchasing supplies on credit
D) Receiving cash from customers
Answer: B) Selling equipment for cash
Q. If a company’s assets are $100,000 and its liabilities are $60,000, what is its equity?
A) $60,000
B) $40,000
C) $100,000
D) $160,000
Answer: B) $40,000
Q. What does the accounting equation represent?
A) The financial position of a company
B) The income statement of a company
C) The cash flow statement of a company
D) The budget of a company
Answer: A) The financial position of a company
Q. If a company pays off a $5,000 loan, how does it affect the accounting equation?
A) Assets increase by $5,000
B) Assets decrease by $5,000
C) Liabilities increase by $5,000
D) Equity decreases by $5,000
Answer: B) Assets decrease by $5,000
Q. Which of the following transactions would decrease both assets and liabilities?
A) Paying rent in cash
B) Purchasing equipment on credit
C) Receiving payment from a customer
D) Borrowing money from a bank
Answer: A) Paying rent in cash
Q. If a company’s assets are $80,000 and its equity is $50,000, what are its liabilities?
A) $30,000
B) $130,000
C) $80,000
D) $50,000
Answer: A) $30,000
Q. What is the accounting equation also known as?
A) The balance sheet equation
B) The income statement equation
C) The cash flow equation
D) The profit equation
Answer: A) The balance sheet equation
Q. Which of the following transactions would increase assets and equity?
A) Paying off a loan
B) Receiving payment from a customer
C) Purchasing equipment on credit
D) Borrowing money from a bank
Answer: B) Receiving payment from a customer
Q. If a company’s assets are $120,000 and its liabilities are $90,000, what is its equity?
A) $210,000
B) $30,000
C) $120,000
D) $90,000
Answer: B) $30,000
Q. What does equity represent in the accounting equation?
A) The total assets of a company
B) The total liabilities of a company
C) The owner’s claim on assets
D) The owner’s claim on liabilities
Answer: C) The owner’s claim on assets
Q. Which of the following transactions would decrease equity?
A) Receiving payment from a customer
B) Paying dividends to shareholders
C) Borrowing money from a bank
D) Purchasing inventory on credit
Answer: B) Paying dividends to shareholders
Q. If a company’s liabilities are $40,000 and its equity is $60,000, what are its assets?
A) $100,000
B) $20,000
C) $40,000
D) $60,000
Answer: A) $100,000
Q. What is the effect on the accounting equation if a company purchases equipment for cash?
A) Assets increase, liabilities decrease
B) Assets decrease, liabilities increase
C) Assets increase, equity decreases
D) Assets decrease, equity decreases
Answer: A) Assets increase, liabilities decrease
Q. Which of the following statements is true regarding the accounting equation?
A) It must always balance
B) It only applies to large corporations
C) It is not used in financial reporting
D) It is not affected by business transactions
Answer: A) It must always balance
