Accounting Equation

What is the basic accounting equation?

_______ is a financial statement that reports a business's assets, liabilities, and capital on a specific date

• Balance Sheet

• Statement of Cash Flow

• Income Statement

• None of the Above

Capital (owner's equity) is the value of the owners' investment in the business after subtracting liabilities from assets.

• True

• False

Which of the following is not a liability

• Inventory

• Car loan

• Mortgage

• Credit card balance

How do you find liabilities?

• Assets + Owner's Equity

• Liabilities - Assets

• Assets - Capital (Owner's Equity)

• None of the Above

Define the term Owner's Equity

 

Which correctly shows a list of assets and liabilities?

• Assets: mortgage, car loan, land

  Liabilities: retirement savings, cash, credit card loans

• Assets: building, cash in hand, accounts receivable

  Liabilities: loans, accounts payable, mortgage

• Assets: creditors, prepaid expenses, loans

  Liabilities: stocks, accounts receivable, car

• None of the above

What must the owner's equity equal if assets equal $1,800 and liabilities equal $800?

• $2,600

• $800

• $1,000

If liabilities equal $400 and owner's equity equals $800, what do the assets equal?

• $400

• $1,200

• $800

Assets = Liabilities + Owner's Equity

Assets - 200,000

Liabilities- ?

Owner's Equity- 90,000

• $200,000

• $110,000

• $290,000