Q 3. Payment of Rs. 5000 towards salaries and wages results in
A) Increase in equity by Rs 5000
B) Decrease in equity by Rs. 5000
C) Decrease in equity by Rs. 5000, if it does not include any advance payment of salaries and wages
D) None of the above
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Ayush Bhattacharya seç B class 6 roll no 11 please mark me present
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Option D is correct, Payment of rupees 5,000 towards salaries and wages results in none of the above.
Option A is increase in equity as payment of salaries and wages is not shareholder fund so this option is wrong because increase in equity will be there if people purchase equity and shares.
Option B is wwong i.e. Decrease in equity as equity is going to decrease when there will be any payment and we are doing payment of salaries not to shareholders.
As by paying salaries and wages we are decreasing liability and it is not at all related to equity.
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