Basic accounting equation

Basic accounting equation

University

10 Qs

quiz-placeholder

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Basic accounting equation

Basic accounting equation

Assessment

Quiz

Business

University

Medium

Created by

Rumi Kader

Used 294+ times

FREE Resource

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

What is the basic accounting equation?

Assets + Expenses = Liabilities + Owner's Equity

Assets + Expenses = Liabilities + Owner's Equity

Assets + Liabilities = Owner's Equity

Liabilities + Revenue = Assets

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If a company's assets increase and its liabilities remain unchanged, how does this affect owner's equity?

Owner's equity increases

Owner's equity decreases

Owner's equity remains unchanged

It depends on the specific assets that increased

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following represents an example of an asset?

Accounts Payable

Equipment

Owner's Drawings

Owner's Capital

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If a company borrows money from a bank, how does this transaction affect the basic accounting equation?

Assets decrease, liabilities decrease

Assets decrease, owner's equity decreases

Assets increase, liabilities increase

Assets increase, owner's equity decreases

5.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Which financial statement is directly related to the basic accounting equation?

Income Statement

Balance Sheet

Statement of Cash Flows

Statement of Owner's Equity

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following transactions would increase both assets and owner's equity?

Payment of rent expense

Purchase of inventory on credit

Sale of goods for cash

Payment of vehicles on credit

7.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Which of the following represents an example of a liability?

Bank

Interest expense

Mortgage loan

Debtors control

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