Accounting Pretest

What is the Accounting Equation?

• Assets / Liabilities = Owners Equity
• Assets * Liabilities = Owners 
• Assets = Liabilities + Owners 
• Assets = Liabilities - Owners 

Is the Accounting Equation used in every transaction?

• Yes
• No

Assets are

• Things you own
• Things you borrow
• Things you owe

Owners Equity is

• What the owner owes
• What the owner has in the company
• What the owner borrows from the business
• What the owner wants for the company

Planning, recording, analyzing, and interpreting financial information

• accounting
• ethics
• transaction
• revenue

Amount owed by a business

• liability
• asset
• capital
• account

A business activity that changes assets, liabilities, or owner's equity

• transaction
• expense
• revenue
• sale on account

Anything of value that is owned

• account
• asset
• withdrawal
• expense

A business owned by one person

• service business
• revenue
• expense
• proprietorship

Double entry in accounting means there must be________ entries for every transaction?

• two

• Three

• six

• one