Basic Accounting Equation Principles
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Questions and Answers

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?

    <p>Assets, liabilities, and owner's equity</p> Signup and view all the answers

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

    <p>Movements in specific accounts</p> Signup and view all the answers

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

    <p>Whether money is borrowed or debited from an account</p> Signup and view all the answers

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

    <p>Capital gains</p> Signup and view all the answers

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

    <p>Future economic benefits owned by the business</p> Signup and view all the answers

    In accounting, where are revenues and expenses classified?

    <p>Owner's equity</p> Signup and view all the answers

    What defines an asset in accounting?

    <p>Anything of value owned by the business</p> Signup and view all the answers

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