Accounting Equations MCQ Questions

What is referred to as an accounting equation?

• Assets = Liabilities + Gross Profit

• Assets = Liabilities + Owner's Equity

• Assets = Liabilities + Income

• Assets = Liabilities - Expenses

What are liabilities?

• They are the company's assets.

• They are the assets owned by the owner of the company.

• They are economic obligations that must be paid by the company.

• They are the income of the company that increases profits.

What are the characteristics of assets?

• They are the income of the company.

• They should be used to pay liabilities.

• They belong to the company's liabilities.

• They are the company's equity.

What are the economic obligations that must be paid by the company?

• It is the company's income.

• It should be used to pay obligations.

• It belongs to the company's obligations.

• It belongs to the company's ownership.

What is included as a liability in accounting equations?

• Company's nominal assets

• Owner's cash investment in the company

• Bank loan

• List of assets

An example of the company's assets is:

• Sales revenue

• Bank loan

• Motor vehicle

• Computer consumption cost

The owner's cash investment means:

An example of company assets,

• Sales revenue

• Bank loan

• Motor vehicle

• Computer consumption cost

Owner's money investment means,

• It is a liability.

• It belongs to the company.

• It is an expense.

• It is an income.

An electricity bill to be paid in the future,

• It is an asset.

• It is a liability.

• It is an income.

• It is an expense.