Trading business and the Accounting Equation

Which is the following is INCORRECT regarding the accounting equation?

• A = OE + L

• A = L + OE

• A = OE - L

• L = A - OE

When goods are sold for cash, how many accounts are affected?

• 2

• 4

• 3

• 1

Which accounts are affected when goods are sold for cash?

• Bank

• Sales

• Cost of Sales

• Trading Stock

Which of the following is CORRECT regarding the sale of goods for cash?

• Debit Bank, Credit Sales and Debit Cost of Sales, Credit Trading Stock

• Debit Bank, Credit Sales

• Debit Cost of Sales, Credit Trading Stock

• Credit Bank, Debit Sales and Debit Cost of Sales, Credit Trading Stock

When recording a cash sale, which figure is used to decrease Trading Stock?

• Selling price

• Cost price

When recording a cash sale, which figure is used to increase Bank?

• Selling price

• Cost price