Accounting Basics

Front

Which of the following is an example of a liability? Cash in the business's bank account, Outstanding debt to suppliers, Equipment owned by the business, Revenue earned from sales

Back

Outstanding debt to suppliers

Front

According to the monetary unit assumption, you:

Back

Keep the value of the pins at $0.20 each

Front

Accounts receivable would be an example of what kind of account?

Back

An asset account.

Front

The owner’s stake in the business is defined as:

Back

Equity

Front

The plant nursery opens a line of credit at a wholesale specialty nursery and uses it to purchase $600 in inventory, how do you categorize the $600 borrowed from the wholesale store?

Back

Liability

Front

If the plant nursery purchases increase liabilities by $600, what also needs to happen for the accounting equation to be in balance?

Back

Add $600 to assets

Front

What is the effect on the plant nursery's accounting equation?

Back

The assets and liabilities of the accounting equation both increase by $150,000.