When a transaction causes an assets account to increase, there is?

Assessment: JAMB UTME - Principles of Accounts - 1998 Subject: Financial Accounting

Question 1 Report

When a transaction causes an assets account to increase, there is?
Answer Details
When a transaction causes an assets account to increase, there is no corresponding decrease of equal amount in the owner's equity account, an increase in a liability account, or a decrease of equal amount in a liability account. Therefore, the first option is incorrect. Instead, an increase in an assets account means that the value of the asset has gone up. This can be due to various reasons such as purchase, production, or an increase in the value of an existing asset. Since assets are owned by the company, an increase in assets increases the overall value of the company, which is reflected in the owner's equity account. So, the correct answer is that an increase in assets account will lead to an increase in the owner's equity account.

Download The App On Google Playstore

Everything you need to excel in your exams

Green Bridge CBT Mobile App
Personalized AI Learning Chat Assistant
200,000+ Exam Questions Across IGCSE, JAMB, WAEC & NECO
Over 3,900 Lesson Notes
Offline Support - Learn Anytime, Anywhere
Green Bridge Timetable
Literature Summaries & Potential Questions
Track Your Performance & Progress
In-depth Explanations for Comprehensive Learning