Introduction & Accounting Equation

Book-keeping is the systematic recording in books of accounts of the business transactions of a company.

• True

• False

Accounting is the process of recording, classifying, summarising, reporting business transactions and interpreting their effects on the affairs of a company.

• True

• False

A business event which can be measured in terms of money and recorded in the books of accounts is called

• Assets

• Equities

• Owners equity

• Transaction

The expression of the equality of an entity’s assets with the claims against them is referred to as the

• Accounting equations

• Accounting transaction

• Bookkeeping

• None of these

Which of the following is an asset?

• Capital

• Salaries

• Cash

• Sales

Which of the following is a liability?

• Bank loan

• Land and building

• Stationery

• Sales

A person or enterprise to whom a debt is owed

• Accounts receivable

• Note Payable

• Note receivable

• Accounts Payable

The accounting equation is

• Liabilities = Assets + Capital

• Assets = Liabilities + Capital

• Liabilities = Assets – Capital

• None of these

The accounting equation represents

• Resources are allocated at cost price

• Owner’s give money for business

• Resources in the business are equal to the source of business

• Resources in the business are not equal to the source of business

Assets minus liabilities is

• Profit

• Working Capital

• Capital

• Long-term liabilities