Accounting Equation Practice Quiz
Accounting Equation Practice Questions
Here are five true or false statements on the Accounting Equation. Can you answer all of them?
The Accounting Equation is: Assets = Liabilities + Equity
a) True
b) False
Assets are the stuff that a business owes.
a) True
b) False
Liabilities are the stuff that a business owes to third parties.
a) True
b) False
If Assets go up then Liabilities have to go up as well.
a) True
b) False
Equity is a business's Revenue.
a) True
b) False
Scroll down to see the answers.
Accounting Equation Practice Question Video
You can also take the test in this video:
Accounting Equation Practice Answers
Here are the answers:
a) True. The Accounting Equation is: Assets = Liabilities + Equity
b) False. Assets are the stuff that a business owns. You can think of them as resources that have value.
a) True. Liabilities are the stuff that a business owes to third parties. They are obligations that require a sacrifice of economic benefit in the future.
a) False. If Assets go up then Liabilities or Equity need to go up as well. This ensures that the Accounting Equations remains in balance.
b) False. Equity represents the owner's claim on Net Assets of the business. It's the stuff that a business owes to its owners.
Did you manage to get them all right? Let us know in the comments below.
Accounting Equation Question Pack
I've made a question pack on the Accounting Equation. It has 25 practice questions and answers. You can download it here if you want to test your understanding of the Accounting Equation.
Free Accounting Equation Cheat Sheet
You can download my Free Accounting Equation Cheat Sheet here. It summarizes all the most important information you need to remember.
