Accounting Basics Quiz

The use of computers in recording business events has made the recording process more efficient.

The cost of an asset and its fair market value are

What does the economic entity assumption require?

Owner's capital at the end of the period is equal to

A balance sheet shows

An income statement

If the owner's equity account increases from the beginning of the year to the end of the year, then

What are liabilities of a company?

• Future economic benefits

• Existing debts and obligations

• Possess service potential

• Things of value used by the business in its operation

The cost principle requires that when assets are acquired, they be recorded at

• appraisal value

• exchange price paid

• selling price

• list price

How may the basic accounting equation be expressed?

• Assets = Equities

• Assets - Liabilities = Owner's Equity

• Assets = Liabilities + Owner's Equity

• All of these