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Financial Forensics · Quiz 1 · 26 Feb 2023 · January 2023 term · Set QPE2

Question 8: A company purchased machinery worth ₹ 7,50,000 on January…

Question 8

+1 markOne correct option

A company purchased machinery worth ₹ 7,50,000 on January 2nd from a vendor. The vendor offered a credit period of 50 days to the company and the same was exercised. What will be the effect in the income statement and balance sheet of the company on January 2nd?

  1. A

    Asset will increase by ₹ 7,50,000 and liability will also increase by ₹ 7,50,000

  2. B

    There will no entry in the books of accounts till the amount is paid

  3. C

    Asset will increase by ₹ 7,50,000 and cash will decrease by ₹ 7,50,000

  4. D

    Only liability will increase by ₹ 7,50,000

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Correct answer

  • A

    Asset will increase by ₹ 7,50,000 and liability will also increase by ₹ 7,50,000

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Question 8 of 25 in the IIT Madras BS Financial Forensics (Financial Forensics) Quiz 1 paper sat on 26 Feb 2023, in the January 2023 term (IIT M DEGREE AN4 EXAM QPE4 26 Feb 2023). It carries 1 mark.

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