Accounting Basics Quiz

The use of computers in recording business events has made the recording process more efficient.

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The cost of an asset and its fair market value are

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What does the economic entity assumption require?

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Owner's capital at the end of the period is equal to

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A balance sheet shows

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An income statement

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If the owner's equity account increases from the beginning of the year to the end of the year, then

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What are liabilities of a company?

• Future economic benefits

• Existing debts and obligations

• Possess service potential

• Things of value used by the business in its operation

The cost principle requires that when assets are acquired, they be recorded at

• appraisal value

• exchange price paid

• selling price

• list price

How may the basic accounting equation be expressed?

• Assets = Equities

• Assets - Liabilities = Owner's Equity

• Assets = Liabilities + Owner's Equity

• All of these