Accounting equation quiz

1. 1.A business has assets of $48,000 and liabilities of $19,500. What is equity?

   Your answer (dollars)
2. 2.A business buys a printer for $600 cash. What happens to total assets?

   Decrease by $600Increase by $1,200No changeIncrease by $600
3. 3.Which transaction decreases assets and decreases equity?

   Buying supplies on creditReceiving a customer advanceRepaying loan principalPaying this month's rent
4. 4.Accruing $300 of unpaid wages at month-end:

   Liabilities +$300, assets +$300No effect until paydayAssets −$300, equity −$300Liabilities +$300, equity −$300
5. 5.Which items are part of equity? Select all that apply.

   Net incomeBank loansOwner withdrawals (as a reduction)Owner investments

   Select all that apply.

6. 6.Equity is $12,000 and liabilities are $7,250. What are total assets?

   Your answer (dollars)
7. 7.Start of month: assets $30,000, liabilities $10,000. During the month equity increased by $4,000 and liabilities decreased by $1,500. What are ending assets?

   Your answer (dollars)
8. 8.Owner withdraws $400 for personal use. Which is true?

   Liabilities increase $400Only cash changesAssets and equity each decrease $400It is an expense on the income statement
9. 9.Which transaction increases both assets and liabilities?

   Paying a supplierCollecting a receivableOwner investing cashBorrowing cash from a bank
10. 10.Earning revenue on account affects the equation how?

    Assets up, liabilities upEquity up, liabilities downNo effect until cash is collectedAssets up, equity up
11. 11.Recording depreciation affects:

    Liabilities and equityNothing until the asset is soldCash and equityAssets (net) and equity, both down
12. 12.Match each transaction to its effect on total assets.

    Owner invests cashChoose…IncreaseDecreaseNo changeBuy equipment with cashChoose…IncreaseDecreaseNo changePay rentChoose…IncreaseDecreaseNo changeBuy supplies on creditChoose…IncreaseDecreaseNo change
13. 13.Which can never happen in a correctly recorded single transaction?

    Assets up with nothing else changingLiabilities down and equity upAssets up and assets down by the same amountAssets up and liabilities up
14. 14.Paying a $250 supplier bill that was already recorded:

    Has no effectIncreases expensesDecreases assets and equityDecreases assets and liabilities
15. 15.A customer pays $500 in advance for next month's service. Equity…

    Stays the sameIncreases by $250Decreases by $500Increases by $500
16. 16.Which statement of the accounting equation is correct?

    Assets + Liabilities = EquityEquity = Assets + LiabilitiesAssets = Revenue − ExpensesAssets = Liabilities + Equity

Explanations for every option appear after you submit. Accounting equation quiz is self-practice, not a proctored test.