1. Introductory Concepts
Accounting Equation — Quiz
Test your understanding of accounting equation with 5 practice questions.
Practice Questions
Question 1
A business has total assets of $ \$600,000 $, total liabilities of $ \$350,000 $, and owner's equity of $ \$250,000 . The business purchases equipment worth $ \$100,000 by taking a loan. What are the new total liabilities after this transaction?
Question 2
A business has total assets of $ \$500,000 $ and total liabilities of $ \$200,000 $. It pays $ \$50,000 in cash to settle part of its liabilities. What is the new owner's equity after this transaction?
Question 3
A business has total assets of $ \$400,000 $ and total liabilities of $ \$250,000 $. It earns a profit of $ \$50,000 , which is not yet withdrawn. What is the new owner's equity after recording this profit?
Question 4
A business has total assets of $ \$300,000 $, total liabilities of $ \$180,000 $, and owner's equity of $ \$120,000 . The business purchases inventory worth $ \$60,000 on credit. What are the new total assets after this transaction?
Question 5
A business has total assets of $ \$750,000 $, total liabilities of $ \$500,000 $, and owner's equity of $ \$250,000 $. The business pays off $ \$100,000 $ of its liabilities using cash. What are the new total assets after this transaction?