Welcome to Transactions Analysis and Impact on the Accounting Equation. Here are 20 questions you can practice with multiple choice answers. Answer all the questions and see your scores.
1.
What happens to the accounting equation when a company issues additional shares of common stock?
2.
If a company purchases inventory on credit, how does this transaction affect the accounting equation?
3.
In the double-entry accounting system, what is the effect of a debit entry on the accounting equation?
4.
What is the effect on the accounting equation when a company borrows money?
5.
If a company earns interest revenue on investments, how does this affect the accounting equation?
6.
How do liabilities impact the accounting equation?
7.
How does paying off a loan affect the accounting equation?
8.
What happens to the accounting equation when a company pays dividends to its shareholders?
9.
What is the fundamental accounting equation?
10.
If a company purchases equipment for $10,000 cash, how does this transaction affect the accounting equation?
11.
Which of the following is NOT included in the accounting equation?
12.
When expenses are incurred, how does it affect the accounting equation?
13.
What is the impact of recording revenue from a sale on the accounting equation?
14.
How does recording depreciation expense affect the accounting equation?
15.
In the accounting equation, what represents the company's resources?
16.
Which financial statement is derived directly from the accounting equation?
17.
Which side of the accounting equation represents the claims of the owner?
18.
What happens to the accounting equation when a company earns revenue?
19.
When a business takes out a loan, how does this affect the accounting equation?
20.
What are the two main components of Owner's Equity in the accounting equation?
