Basic Accounting Equation Principles

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What must assets equal according to the basic accounting equation?

The sum of liabilities and owner's equity (correct)

The sum of revenues and expenses

The sum of expenses and owner's equity

The sum of liabilities and normal balances

Which accounts have normal balances as credits?

Owner's equity accounts (correct)

Asset accounts

Liability accounts

Revenues accounts

What separates the left side (debit) from the right side (credit) of the accounting equation?

Plus sign

Comma

Minus sign

Equals sign (correct)

Which major accounts are perfectly captured by the accounting equation?

Assets, liabilities, and owner's equity Signup and view all the answers

What is recorded in 'journals' and 'ledgers' in accounting?

Movements in specific accounts Signup and view all the answers

What is the primary difference between a debit card and a credit card?

Whether money is borrowed or debited from an account Signup and view all the answers

Which of the following is NOT considered a major account in accounting?

Capital gains Signup and view all the answers

What does the term 'assets' refer to in accounting?

Future economic benefits owned by the business Signup and view all the answers

In accounting, where are revenues and expenses classified?

Owner's equity Signup and view all the answers

What defines an asset in accounting?

Anything of value owned by the business Signup and view all the answers

Basic Accounting Equation Principles

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Questions and Answers

What must assets equal according to the basic accounting equation?

Which accounts have normal balances as credits?

What separates the left side (debit) from the right side (credit) of the accounting equation?

Which major accounts are perfectly captured by the accounting equation?

What is recorded in 'journals' and 'ledgers' in accounting?

What is the primary difference between a debit card and a credit card?

Which of the following is NOT considered a major account in accounting?

What does the term 'assets' refer to in accounting?

In accounting, where are revenues and expenses classified?

What defines an asset in accounting?

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