Accounting equation

A business purchases land by paying half in cash and signing a note payable for the balance. What is the effect on accounting equation?

• Increase in Assets (Land), Decrease in Assets (Cash), Increase in Liability (Notes Payable)

• Increase in Assets (Land), Increase in Assets (Cash), Increase in Liability (Notes Payable)

• Increase in Assets (Land), Decrease in Assets (Cash), Increase in Liability (Accounts Payable)

• Increase in Assets (Land), Increase in Liability (Notes Payable)

If the total liabilities is R15,000 and the total assets is R23,000, what is the total equity using the accounting equation?

• R48,000

• R8,000

• R8,800

• R800

Mr. Cruz, the owner of the Isaw Shop, invests personal cash in the business. What is the effect on accounting equation?

• Increase in Assets, Increase in Equity

• Decrease in Assets, Increase in Equity

• Increase in Liabilities, Increase in Assets

• Decrease in Assets, Decrease in Equity

What is the effect on an accounting equation if a business repays the bank that had lent money to the business?

• Decrease in Assets, Decrease in Liabilities, No effect in Equity

• Increase in Assets, Increase in Liabilities, No effect in Equity

• Increase in Assets, Decrease in Liabilities, No effect in Equity

• Decrease in Assets, Increase in Liabilities, No effect in Equity

Which one best represents EQUITY?

• EQUITY = ASSETS - LIABILITIES

• EQUITY = CAPITAL + ASSETS

• EQUITY = CAPITAL - DRAWING

• EQUITY = LIABILITIES - ASSETS

The Accounting Equation

• Assets= Liability + Owners Equity

• Liability= Assets + Owners Equity

• Owners Equity= Assets - Liability

• Assets= Liability- Owners Equity

Q. Assets = Liabilities + Owner,s Equity

If Assets 4500

Liabilities 230

Owner,s Equity is

• 4500

• 4270

• 4320

Assets = Liabilities + owner,s Equity

if the Assets 5320

Liabilities -??????

Owner,s Equity 1320

• 5320

• 320

• 4000

Q - 3 Assets + Liabilities + Owner,s Equity

Assets -??????

Liabilities 1000

Owner,s Equity 3270

• 3000

• 4270

• 1000

If the total liabilities is R15, 000 and the total assets is R23,000, what is the total equity using the accounting equation?

• R8,001

• R8,000

• 8,000.01