Accounting Equation

The correct formula for the accounting equation is ...

• A = E-L

• E=A+L

• A = E+L

• L=A+E

Assets are ...

• Possessions

• Business buys with the purpose of selling them

• Only costs the business money

• Payables

Equity is ...

• Payables

• Possessions

• The owners' share/s

• Costs the business money

Liabilities are ...

• Receivables

• Debt

• Possessions

• Owners' share/s

Examples of assets include:

• Land and buidlings

• Vehicles

• Bank

• Trading stock

A = E+L

? = 200 000 + 100 000

Assets' value is ...

• 250 000

• 300 000

• 200 000

• 400 000

A = 250 000

E = 150 000

L = ?

What is the liabilities' value?

• 50 000

• 150 000

• 100 000

• 400 000

The accounting equation is also known as the ... equation

• Income statement

• Balance sheet

• Statement of financial position

• Financial statement

Examples of liabilities include:

• Payables

• Loans

• Bonds

• Mortgages

Examples of owners' equity includes:

• Debt

• Capital

• Drawings

• Profit = Income - Expenses