Accounting Basics Quiz

What is the key principle behind the accounting equation?

• Assets equal Equity plus Liabilities

• Assets equal Equity minus Liabilities

• Assets equal Liabilities plus Equity

• Assets equal Liabilities minus Equity

What is the word used to describe the stuff that the Business Owns?

• Equity

• Expenses

• Liabilities

• Assets

What is used to describe what the business owes to third parties?

• Equity

• Assets

• Liabilities

• Revenue

What is used to describe what the business owes to its owner?

• Expenses

• Liabilities

• Equity

• Assets

What is a Balance Sheet?

• A snapshot of a business's Assets, Liabilities, and Equity

• A snapshot of a business's Equity only

• A snapshot of a business's Liabilities only

• A snapshot of a business's Assets only

What happens to the accounting equation when a business makes a profit?

• It disappears

• It becomes irrelevant

• It becomes unbalanced

• It remains the same

What is the most common form of Equity?

• Liabilities Equity

• Expenses Equity

• Stockholders Equity

• Revenue Equity

What is the expanded Accounting Equation?

• Assets equals Liabilities plus Equity

• Assets plus Liabilities equals Equity

• Liabilities minus Equity equals Assets

• Assets minus Liabilities equals Equity

What is the category that includes Cash, Inventory, and Equipment?

• Assets

• Liabilities

• Equity

• Expenses

What is the category that includes Accounts Payable and Loans Payable?

• Revenue

• Liabilities

• Assets

• Equity