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.
What happens to the accounting equation when a company issues common stock for cash?
2.
How does the purchase of inventory on account affect the accounting equation?
3.
When a company pays dividends to its shareholders, what is the effect on the accounting equation?
4.
When a company purchases office supplies on account, how does this transaction affect the accounting equation?
5.
If a company purchases equipment by obtaining a loan, how does this transaction impact the accounting equation?
6.
Which of the following is an example of an asset?
7.
When a company receives cash from a customer for services rendered, what happens to the accounting equation?
8.
If a company pays its rent expense in cash, how does this transaction affect the accounting equation?
9.
How does the recognition of revenue for services performed affect the accounting equation?
10.
What is the effect of paying off a loan in cash on the accounting equation?
