Accounting Equation: Fill In the Blanks

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on May 17, 2022

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Take your Accounting equations Fill in the blanks Test below:

Question No. 1

In accounting only events are considered.

Question No. 2

is an occurrence, happening change or incident which may or may not bring any change in the financial position of the business.

Question No. 3

Accounting equation is: Assets = Liabilities +

Question No. 4

The excess of assets over liabilities is .

Question No. 5

The obligations of the business to creditors are called .

Question No. 6

When an expense is paid, the amounts of two items in the accounting equation are reduced. These are .

Question No. 7

An increase in one asset either reduces another asset or increases a .

Question No. 8

A decrease in one asset either increases or decreases a liability.

Question No. 9

In the accounting equation, the discount received is to the owner's equity.

Question No. 10

Assets - Owner's equity =

Question No. 11

= Liabilities + Owner's equity.

Question No. 12

Owner's equity/capital is the obligation of the business to its .

Question No. 13

A transaction that does not involve an outside party is called .

Question No. 14

A system in which business transactions are recorded with dual aspects is known as .

Question No. 15

Assets = Equities represent .

Question No. 16

should be expressed in terms of money and should bring change in the financial position of the business.

Question No. 17

All the transactions where the word paid is mentioned are called .

Question No. 18

events are not related to money.

Question No. 19

According to the double-entry system, every transaction has parts.

Question No. 20

is the basis for the formation of the Accounting Equation.

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Frequently Asked Questions

What is the accounting equation?

The accounting equation is an equation that allows us to determine whether or not there has been a difference in the total assets and total liabilities. We also can find out if there has been a change in stockholders’ equity for either the debit or credit side of the account.

How does the accounting equation impact a company’s financial statements?

Assets = liabilities + owners equity

How does the accounting equation impact a company’s financial statements?

How does the accounting equation impact a company’s financial statements?

How can the accounting equation be used to track a company’s financial health?

The accounting equation can be used to track a company’s financial health by monitoring the changes in its assets, liabilities, and shareholders’ equity. When one of these elements increases or decreases, it can indicate whether a company is becoming more or less financially healthy.

What are the components of the accounting equation?

The components of the accounting equation are assets, liabilities, and shareholders’ equity. These three elements are all part of a company’s balance sheet.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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