Basic accounting equation quiz

The basic accounting equation is Assets = Liabilities + __________.

1. Which of the following will cause owner's equity to increase?
a. Expenses

b. Owner Draws

c. Revenue
2. Which of the following will cause owner's equity to decrease?
a.Net Income

b.Net Loss
c.Revenue
3. The accounting equation should remain in balance because every transaction
affects how many accounts?
a. Only One

b. Only Two
c.Two Or More

4. A corporation's net income is eventually recorded in the following stockholders'

equity account: ___Retained Earnings_______
5. A corporation's quarterly ___dividends_______ will cause a reduction in the
corporation's retained earnings, which in turn reduces the corporation's stockholders'
equity. However, this will not reduce the corporation's net income.
6. The financial statement with a structure that is similar to the accounting equation
is the ___balance sheet_______
7. The financial statement that reports the portion of change in owner's equity
resulting from revenues and expenses during a specified time interval is the _ Income
Statements ______
8. Using the basic accounting equation identify the missing item.
Assets = 8969 Liabilities = 13738 Capital = 1000 Retained Earnings = ?

a. -5,469
b. 5,769
c. -5,769
9. The accounting equation is a mathematical principle?
a. True
b. False

10. What does the accounting equation form the basis for?
a. Single entry bookkeeping
b. Cash books
c. Double entry bookkeeping

11. Tick some assets that a business can own

a. Cash
b. Office equipment
c. Loans
d. Machinery
e. Subscriptions
f. Vehicles
g. Overheads
h. Account Receivables

12. All the accounts under assets, liabilities and equity are called
a. Variable
b. Permanent
c. Temporary
Permanent Account = Real Accout: Có số dư cuối kỳ
13. Tick some of the liabilities that a business can owe
a. Bank loans
b. A building
c. Borrowed Funds
d. Income
e. Accounts Payable
f. Sales

14. What are accounts under the revenue and expenses known as?
a. Variable
b. Permanent
c. Temporary

15. What accounting report are assets, liabilities and equity shown on?
a. Balance Sheet
b. Profit and Loss statement
c. Loan statement

16. What does the balance sheet indicate about the business?
a. The financial condition
b. The business made a profit
c. The names of all the customers