Welcome to Understanding Assets, Liabilities, and Owner's Equity. Here are 20 questions you can practice with multiple choice answers. Answer all the questions and see your scores.
1.
When a company receives cash from a customer for services rendered, what happens to the accounting equation?
2.
How does the recording of interest expense impact the accounting equation?
3.
What happens to the accounting equation when a company records a decrease in prepaid expenses as they are consumed?
4.
What is the effect of paying off a loan in cash on the accounting equation?
5.
When a company purchases office supplies on account, how does this transaction affect the accounting equation?
6.
If a company purchases equipment by obtaining a loan, how does this transaction impact the accounting equation?
7.
What happens to the accounting equation when a company issues common stock for cash?
8.
How does the recognition of prepaid expenses impact the accounting equation?
9.
When a company accrues unpaid expenses, what happens to the accounting equation?
10.
When a company pays dividends to its shareholders, what is the effect on the accounting equation?
11.
If a company pays off a portion of its accounts payable, how does this transaction affect the accounting equation?
12.
What happens to the accounting equation when a company records depreciation expense for equipment?
13.
If a company pays its rent expense in cash, how does this transaction affect the accounting equation?
14.
. How does the payment of salaries to employees impact the accounting equation?
15.
Which of the following is an example of an asset?
16.
How does the recognition of revenue for services performed affect the accounting equation?
17.
When a company purchases treasury stock, what is the effect on the accounting equation?
18.
How does the purchase of inventory on account affect the accounting equation?
19.
What happens to the accounting equation when a company records an increase in accounts receivable due to sales made on credit?
20.
When a company receives interest income from investments, what is the effect on the accounting equation?
