Quiz 51: Assets Liabilities Equity

The accounting equation tells us that the assets of a business are equal to the liabilities plus the owners equity in the business. In any transaction the accounting equation must balance, and it is important to be able to identify whether a transaction affects the assets, liabilities or the equity of a business.

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For each question identify which category (assets, liabilities or equity) does not form part of the accounting equation for the transaction shown. Click on an answer to reveal whether its Right! or Wrong.

1. The owner increases the capital of the business by depositing personal cash. Which of assets liabilities equity is not part of the transaction?
Wrong
Right!
Wrong
2. The owner increases the capital of the business by transferring a computer to the business. Which of assets liabilities equity is not part of the transaction?
Right!
Wrong
Wrong
3. A new motor vehicle is purchased on account from a supplier. Which of assets liabilities equity is not part of the transaction?
Wrong
Right!
Wrong
4. A check is issued to pay a supplier. Which of assets liabilities equity is not part of the transaction?
Wrong
Wrong
Right!
5. A check is received from a customer for goods supplied for cash. Which of assets liabilities equity is not part of the transaction?
Wrong
Wrong
Right!
6. Rent for the factory premises is paid in cash. Which of assets liabilities equity is not part of the transaction?
Right!
Wrong
Wrong
7. The owner withdraws cash for personal use. Which of assets liabilities equity is not part of the transaction?
Wrong
Right!
Wrong
8. A sale is made to a customer on account terms. Which of assets liabilities equity is not part of the transaction?
Right!
Wrong
Wrong
9. An invoice for services for the period is received from a supplier. Which of assets liabilities equity is not part of the transaction?
Right!
Wrong
Wrong
10. Depreciation for the period is recorded in the accounting records. Which of assets liabilities equity is not part of the transaction?
Wrong
Wrong
Right!

 

 

 

 

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Last modified July 16th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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