AE for Drawings

Q.

Give an example for each of the following types of transaction.
(i) Increase in one asset, decrease in another asset.
(ii) Increase in asset, increase in liability.
(iii) Increase in asset, increase in owner's capital.
(iv) Decrease in asset, decrease in liability.
(v) Decrease in asset, decrease in owner's capital.
(vi) Decrease in liabilities, increase in owner's capital.
(vii) Increase in one liability, decrease in another liability.
(viii) Increase in liabilities, decrease in owner's capital.

Q.

The owner withdraws cash from the business for personal use. Which of the following is true?

1. Assets - Increase
   Liabilities - No effect
   Capital - Decrease

2. Assets - Decrease
   Liabilities - Increase
   Capital - No effect

3. Assets - No effect
   Liabilities - Decrease
   Capital - Increase

4. Assets - Decrease
   Liabilities - No effect
   Capital - Decrease

Q. Drawings will the capital of the business entity.

1. increase
2. decrease
3. not change

Q.

Mr. Ajay has a business of selling of fans. He took 1 fan to his house for personal use. Which of the following is affected from these drawings in sole-proprietorship business?

1. Assets - Decrease
   Liabilities - Increase
   Capital - No effect

2. Assets - Increase
   Liabilities - No effect
   Capital - Increase

3. Assets - No effect
   Liabilities - Increase
   Capital - Increase

4. Assets - Decrease
   Liabilities - No effect
   Capital - Decrease