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Question: When fixed assets are sold:
a) Total assets will increase
b) Total liabilities will increase
c) Total assets will decrease
d) There is no change in total assets

Answer: (d)
Description: If it can be said that the fixed assets are sold at book value itself then there will be no change in total assets as furniture will be sold so it is removed from Balance Sheet but Cash/ Bank will flow in.
Journal Entry: Cash A/C Dr
To Furniture A/C



Category Fundamentals of Accounting Interview Questions & Answers - Exam Mode / Learning Mode
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Question: When fixed assets are sold:
a) Total assets will increase
b) Total liabilities will increase
c) Total assets will decrease
d) There is no change in total assets

Answer:

(d)
Description: If it can be said that the fixed assets are sold at book value itself then there will be no change in total assets as furniture will be sold so it is removed from Balance Sheet but Cash/ Bank will flow in.
Journal Entry: Cash A/C Dr
To Furniture A/C Source: CoolInterview.com



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