ACCTG 111 - Fundamentals of Accounting /

Financial Accounting and Reporting Part 1

Lesson 2 Accounting Equation and Double-Entry System
NAME of STUDENT: ____________________________________

Compute for the following.

HINT: A=L+E

1 If a business has total assets of P100,000.00 and total liabilities of P60,000.00, what is the owner’s equity?

2 If a business has total liabilities of P60,000.00 and total equity of P60,000.00, what is the total assets?

3 If a business has total equity of P90,000.00 and total assets of P140,000.00, what is the total liabilities?

Identify which account is affected in the following. (Ex: Cash, Capital, Accounts Payable, etc.)
HINT: Use the 6 questions in Analyzing A Transaction

4 Purchased equipment for cash.

5 Purchased equipment on account

6 Paid cash on equipment loan.

7 Sold merchandise inventory on account

8 Sold merchandise inventory for cash.

9 Collected accounts receivable from customer.

True or false
HINT: Use the lesson 2 presentation

10 The basic accounting equation is written as Assets = Liabilities + Equities.

11 Total debits always equal to total credits.

12 Accounting equation can be simply defined as a relationship between assets,

liabilities and owner’s equity in the business.
13 Double-entry accounting is a debit in one accounting register and a credit in another

14 Accounting equation means that assets always equal to the sum of equities and liabilities.

15 The ingredients of this accounting equation - Assets, Liabilities, and Owner's equities
are the three major sections of the Balance sheet.

HAPPY LEARNING!!!