Question

Sipho is the proprietor of Sipho’s Café. On 28 February 20.9, the business had the following assets and liabilities:

Equipment
Trading inventory
Bank overdraft
Debtors control
Creditors control
Which of the following amounts reflects the equity at 28 February 20.9?

1. A R127 000

2. B R113 000

3. C R67 000

4. D R107 000

5. Which one of the following statements about posting to the ledger is false?

   Decreases in asset accounts are recorded on the credit side. Increases in liability accounts are recorded on the credit side. Increases in Capital are recorded on the debit side.
   Increases in Income accounts are recorded on the credit side.

6. Which of the following statements is false? When posting to the ledger:

7. decreases to capital account are recorded on the debit side.
   decreases to asset accounts are recorded on the debit side. C increases to expense accounts are recorded on the debit side. D increases to income accounts are recorded on the credit side.

Answer 1

Question: Which of the following amounts reflects the equity at 28 February 20.9?

Answer is C R67000 reflects the Equity.

Questions:

1. Which one of the following statements about posting to the ledger is false?

   Q. Decreases in asset accounts are recorded on the credit side.

Ans.: Its True.

Q. Increases in liability accounts are recorded on the credit side

Ans. Its false.

Q. Increases in Capital are recorded on the debit side.

Ans.: Its false.

Q.: Increases in Income accounts are recorded on the credit side.

Ans. : Its True.

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