Frai Account with Aduserens 73 lication Exercises le-choice Questions business transaction which records income earned 1 A will increase assets and reduce equity s will increase assets and equity c will increase assets and liabilities D will leave total assets unchanged which of the following describes the statement of comprehensive income? mmarises the change in retained earnings over a specific period of time ents the income and expenses of an entity for a specific period of time C Reports the changes inassets, liabilities and equity over a period of time D Reports the assets, liabilities and equity at a specific point in time An expense will have the following effect: A Reduce assets and liabilities C Leave equity unchanged 3 B D Reduce equity Have the same effect as liability 4 If a fax machine is serviced on 15 October and an invoice is issued, the owner picks up the fax machine on the same day and sends the cheque to the servicing company on I November, and the company banks in the cheque on 3 November, income is recognized by the service provider on A 15 October C 3 November B 1 Nowember D None of the above From the following list, which item will be recorded as income? A Aloan is received from a bank B 8 Money is collected from a customer owing from goods sold last week A sale is made on credit C D Additional capital is contributed by the owner 6 trading business purchasing goods on credit is a(n): The liability arising from a A trade payable C income B trade receivable D expense 7 Liabilities of an entity are owed to A debtors C owners B creditors D shareholders statement of financial position of a sole trader's business A lists the assets, liabilities and equity at a point in time B lists all assets and liabilities at present values C gives all ofthe facts regarding financial position D is the only financial report of importance The