Accounting equation mixed practice
Objective: Analyze unfamiliar transactions confidently using the equation.
Recommended first: Prepayments, advances, and accruals in the equation
This lesson mixes everything from Module 1. For each transaction, write down: what did the business receive or give up, and who has a claim on it? Then decide the direction of each change.
Watch for second-step transactions. Paying wages that were already accrued does not create a new expense — the expense was recorded last month. Delivering a service a customer prepaid reduces a liability and earns revenue, without any cash moving.
Mixed sets are where real understanding shows. Some transactions only reverse an earlier accrual or deferral, so the second step changes liabilities or assets without touching equity. Others, like buying equipment with a note, increase both sides of the equation without any cash. Write the effect on each part of the equation before checking your answer.
Check your work
- Is this the first or second step of a two-step transaction?
- Did you avoid recording the same expense or revenue twice?
- Does A = L + E still hold?
A tutor delivers $300 of sessions that were prepaid last month. Unearned Revenue −$300; Service Revenue (equity) +$300. Assets are unchanged.
| Account | Debit | Credit |
|---|---|---|
| Unearned Revenue | $300.00 | |
| Service Revenue | $300.00 |
Common mistakes
✗ Double-counting an expense when paying an accrual.
✓ Check whether the expense was already recorded in an earlier period.
Guided practice
Use hints freely here.
Item 1 of 1
Repay loan principal
Rise & Shine Bakery repays $2,900.00 of loan principal to the bank.
Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 8
Buy equipment with a note
Greenway Landscaping buys a mower for $4,250.00, signing a note payable to the dealer.
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Key terms
- Notes payable
- Formal loans the business must repay.
- Accrual basis
- Recording revenue when earned and expenses when incurred.
References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.