Question

Give one example of each of the following transactions:(2M) (i) Increase in an asset and a liability.
(ii) Decrease in an asset and a liability.
(iii) Increase in assets and capital.
(iv) Decrease in assets and capital.

Answer 1

Explanation:

Increase in asset

machinery purchase

Increase in Liability

creditors increase as purchase made

Decrease in asset

Patents written off

Decrease in liability

bank loan paid off

Increase in asset

vehicle purchase