Accounting Equation

The Accounting Equation must always be in balance? 

• True
• False

Assets 

• Anything owed by the company
• Anything owned of value by the company

Supplies purchased on account that will be paid for at a later date is a liability.

• True
• False

The company purchases equipment with its cash

• Assets (NE)
• Liabilities (I)
• Equity (I)

If the total liabilities is P 15, 000 and the total assets is P 23,000, what is the total equity using the accounting equation?

• P 8,001
• P 8,000
• P 8,000.01

In what accounting element can we classify INVENTORIES?

• Asset
• Liabilities
• Equity

What account type is the cash account?

• Liability
• Asset
• Equity

Any amounts owed by a business and reported on the balance sheet are referred to as ________________.

• assets
• liabilities
• profit
• expenses

Assets = £120,000

Capital = £75,000

Liabilities = ?

• £195,000

• £45,000

• £35,000

What is The Accounting Equation?

• Assets + Liabilities = Capital

• Assets - Liabilities = Capital

• Assets + Capital = Liabilities