Edited Accounting Equation

What is the branch of accounting that prepares financial statements for use by owners, creditors, suppliers, and other external stakeholders?

• Financial accounting

• Managerial accounting

• Cost accounting

• Tax accounting

What are resources of economic value owned by a business called?

• assets

• liabilities

• expenses

• revenues

What is an amount owed (debt) by a business known as?

• liability

• asset

• equity

• revenue

What is the term for the owners' claim to assets?

• stockholders equity

• liabilities

• revenue

• expenses

The following represent amounts a company is waiting to receive in the future from a customer for the sale of goods or services:

• accounts receivable

• accounts payable

• inventory

• deferred revenue

The following represent the amounts a company owes for goods or services already acquired on account (on credit):

• accounts payable

• accounts receivable

• inventory

• equity

What is a transaction in which the merchandise purchased and received by a company is to be paid to their suppliers at a later date called?

• purchase on account

• cash purchase

• immediate payment

• prepaid order

What is an equation showing the relationship among assets, liabilities, and owner's equity called?

• accounting equation

• balance sheet

• income statement

• cash flow statement

What does A.L.O.E stand for in accounting?

• Assets = Liabilities + Owner's Equity

• Assets = Liabilities + Other Expenses

• Assets = Loans + Owner's Equity

• Assets = Liabilities + Outstanding Expenses

What does A.D.E.L.E.R stand for in accounting?

• Increases in value of a financial account: Debit side - Assets, Dividend/Draw, Expenses; Credit side - Liability, Equity, Revenue

• Increases in value of a financial account: Debit side - Liabilities, Equity, Revenue; Credit side - Assets, Dividend/Draw, Expenses

• Increases in value of a financial account: Debit side - Assets, Equity, Revenue; Credit side - Liabilities, Dividend/Draw, Expenses

• Increases in value of a financial account: Debit side - Revenue, Equity, Liabilities; Credit side - Assets, Dividend/Draw, Expenses