3 Questions
Which of the following best defines the accounting equation?
A statement of a company's financial position
What is the formula for the accounting equation?
Assets = Liabilities + Equity
Which of the following is an example of an asset in the accounting equation?
Accounts receivable
Study Notes
Accounting Equation
- The accounting equation is a fundamental concept in accounting that defines the relationship between a company's assets, liabilities, and equity.
- The formula for the accounting equation is: Assets = Liabilities + Equity.
- This equation is a balance sheet equation that suggests that the total value of a company's assets is equal to the total value of its liabilities and equity.
Assets
- Assets are resources owned or controlled by a business, such as cash, inventory, property, and equipment.
- Examples of assets include:
- Cash
- Inventory
- Property
- Equipment
- Investments
Test your knowledge of the fundamental principle of accounting with our quiz on the accounting equation. This quiz will cover the definition of the accounting equation, its formula, and examples of assets in the equation. Sharpen your accounting skills and improve your understanding of the accounting equation with this quiz.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
