Accounting equation practice

Decide how each transaction changes assets, liabilities, and equity. These are the building blocks of every journal entry.

Item 1 of 60

Freeeasy

Owner invests cash

The owner of Maple Street Tutoring deposits $5,000.00 of personal savings into the business bank account.

Quick lesson

How transactions affect the equation

Before writing any entry, a bookkeeper asks: which parts of the equation change, and in which direction? Most transactions fall into a few patterns.

Common patterns

Transaction	Assets	Liabilities	Equity
Owner invests cash	+		+
Buy equipment for cash	+ and −
Buy supplies on credit	+	+
Earn revenue (cash or on account)	+		+
Pay an expense	−		−
Pay a supplier	−	−
Owner withdraws cash	−		−

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How grading works

Answers are checked on our server against a fixed rubric: accounts, debit or credit side, amounts to the cent, and dates. Hints start with the smallest useful clue. Revealing the solution is allowed, but mastery requires a later unassisted success.