Accounting Chapter 1 Review

The Accounting Equation is…...

• Assets + Liabilities = Owner's Equity
• Assets = Liabilities + Owner's Equity
• Assets = Liabilities - Owner's Equity
• Assets - Liabilities = Owner's Equity

A business that is owned by one person is referred to as a.........

• small business
• corporation
• sole proprietorship
• none of these

Anything that is owned by the business and of value.

• assets
• equities
• liabilities
• expenses

What are the financial rights to the assets of a business called?

• assets
• equities
• liabilities
• revenue

What is the amount owed by a business considered?

• asset
• owner's equity
• revenue
• liability

Which of the following is true about the accounting equation?

• it changes by business
• it must be in balance
• it does not have to balance

What type of account is cash?

• asset
• liability
• owner's equity
• none of these

What type of account is a capital account?

• asset
• liability
• owner's equity
• none of these

What are decreases in owner's equity resulting from the operation of a business called?

• sales
• liabilities
• withdrawals
• expenses

These take place when assets are taken out of a business for the owner's personal use.

• sales
• liabilities
• withdrawals
• expenses