Accounting Equation Q&A

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on November 19, 2021

Test your knowledge of the accounting equation by answering the 10 short questions given below. We suggest that you try to answer each question yourself before clicking on the “See answer” button.

If you find it difficult to answer any of these questions, read our article on the accounting equation to learn more.

1. What is the accounting equation?

2. What is owner's equity?

3. If total assets are $50,000 and total liabilities are $20,000, what is the amount of owner's equity?

4. If total liabilities are $40,000 and owner's equity is $60,000, what is the amount of total assets?

5. If total assets are $20,000 and owner's equity is $15,000, what is the amount of total liabilities?

6. Merchandise costing $12,000 are sold for $15,000. How does this transaction impact the accounting equation?

7. Merchandise costing $15,000 are sold for $12,000. How does this transaction impact the accounting equation?

8. Which financial statement is closely related to the accounting equation and why?

9. What is the difference between liabilities and owner's equity?

10. How does depreciation on a fixed asset influence the accounting equation?

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®), 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, his interview on CBS, or check out his speaker profile on the CFA Institute website.

2 thoughts on “Accounting Equation Q&A”

Leave a Comment