2024-10-11-Financial Management

What is the correct formula for the accounting equation?

• Assets = Equity - Liabilities

• Assets = Liabilities + Equity

• Liabilities = Assets - Equity

• Equity = Assets + Liabilities

Which of the following correctly describes the relationship in the accounting equation?

• Assets always equal liabilities

• Liabilities are always greater than equity

• Assets are financed by a combination of liabilities and equity

• Equity is always greater than assets

Which of the following is an example of a current asset?

• Land

• Machinery

• Cash

• Building

Which of the following is considered a non-current (fixed) asset?

• Accounts Receivable

• Cash

• Inventory

• Machinery

If a company has assets worth R500,000 and liabilities of R300,000, what is the value of its equity?

• R200,000

• R800,000

• R500,000

• R300,000

Which of the following is an example of a liability?

• Inventory

• Accounts Payable

• Retained Earnings

• Building

Which of the following would be classified as a long-term liability?

• Accounts Payable

• Short-term Loan

• Mortgage Loan

• Cash

Which of the following items is considered equity?

• Retained Earnings

• Accounts Payable

• Bank Loan

• Inventory

Which of the following is a liability?

• Common Stock

• Retained Earnings

• Bank Loan

• Land

Which of these is an example of an intangible asset?

• Patents

• Equipment

• Cash

• Inventory