Welcome to Analyzing Financial Position using the Accounting Equation. Here are the questions you can practice with multiple choice answers. Answer all the questions and see your scores.
1.
Which of the following represents the basic accounting equation?
2.
If liabilities decrease, what will happen to the accounting equation?
3.
What happens to the equity if expenses decrease?
4.
If a company issues stock for cash, how does this transaction affect the accounting equation?
5.
If a company's assets increase, what will happen to the equity?
6.
What effect does revenue recognition have on the accounting equation?
7.
If a company pays dividends to its shareholders, how does this affect the accounting equation?
8.
If a company purchases equipment on credit, what happens to the accounting equation?
9.
What happens to equity if there is a net loss for the period?
10.
If a company pays off a loan, what happens to the accounting equation?
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