1000: The Accounting Equation

Question 1

What is the basic accounting equation?

Answer 1

assets=liabilities+owners’ equity

Question 2

What is the expanded owners’ equity

Answer 2

capital+income-expenses-drawings

Also capital+profits-drawings

Question 3

Types of assets

Answer 3

cash at bank, inventory, plant and equipment, buildings, prepaid expenses, accounts receivable

Question 4

Types of liabilities

Answer 4

accounts payable

Question 5

Types of owners’ equity

Answer 5

capital, income, expenses, drawings or withdrawals, dividends

Question 6

Types of income

Answer 6

sales revenue, service revenue, interest income

Question 7

Types of expenses

Answer 7

wages, rent

Question 8

What does ALOIE stand for?

Answer 8

assets, liabilities, owners’ equity, income, and expenses