1. On the last day of the period, Ahmed Islamic Finance Training buys a computer for $2,000 on credit. In what manner does this transaction affect the accounting equation?

a. Office Equipment increases and Cash decreases.

b. Office Equipment increases and Accounts Payable decreases.

c. Office Equipment increases and Accounts Payable increases.

d. Asset increases and Liabilities and Owners Equity increases.

2. Which of the following statements about ledgers is correct?

a. A ledger is a collection of the asset accounts in a company.

b. A ledger is a book to record daily transactions.

c. A ledger is a collection of all the accounts maintained by a company.

d. A ledger is a book that reports the outcome of the business operation.

3. Which of the following statements is correct?

a. Debits decrease liabilities and increase assets.

b. Debits increase both assets and liabilities.

c. Debits decrease both assets and liabilities.

d. Debits decrease assets and increase liabilities.

4. If the accounts of Aafaq Islamic Finance show a cash balance of $75,000, equipment $100,000, office building $500,000, and accounts payable $150,000, what is the company owners equity?

a. $425,000

b. $25,000

c. $450,000

d. $525,000

5. Which of the following statements about ledgers is correct?

a. A ledger is a collection of the asset accounts in a company.

b. A ledger is a book to record daily transactions.

c. A ledger is a collection of all the accounts maintained by a company.

d. A ledger is a book that reports the outcome of the business operation.

6. The Material Supplies account at Dar Al Fatina shows the following transactions: Material supplies purchased for cash AED1,000, additional supplies purchased for cash AED500, material supplies purchased on account AED3,500. Dar Al Fatina paid AED1,000 of the accounts payable. What is the Material Supplies account balance?

a. AED4,000

b. AED1,500

c. AED6,000

d. AED5,000