Question 1

What is the basic accounting equation?

Accepted Answer

Assets=Liabilities + Owner’s Equity

Answer

Assets=Liabilities + Expenses

Answer

Revenue= Liabilities + Owner’s Equity

Answer

Assets= Income + Expenses

Question 2

Using the Accounting Equation, how much is the owner's equity if the assets are worth ₱150,000 and the liabilities are ₱60,000?

Accepted Answer

90&#44;000

Answer

80&#44;000

Answer

60&#44;000

Answer

100&#44;000

Question 3

Which of the following correctly shows the rule of debit and credit?

Accepted Answer

Assets increase on the debit side

Answer

Assets increase on the credit side

Answer

Liabilities decrease on the credit side

Answer

Owner's equity increases on the debit side

Question 4

Which account is normally increased by a credit?

Accepted Answer

Accounts Payable

Answer

Cash

Answer

Equipment

Answer

Expenses

Question 5

Using the accounting equation, what is the correct entry or recording when the owner invests cash in the business?

Accepted Answer

Debit cash to show the increase, credit owner’s equity to show the increase

Answer

Debit cash to show the increase, credit liabilities to show the increase

Answer

Debit cash to show the increase, credit accounts payable to show the increase

Answer

Debit owner’s equity to show the increase, credit cash to show the increase

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