The accounting environment and the accounting equation quiz: N(A)-Level Principles of Accounts (SEAB 7086) quiz

Assets = Liabilities - Owner's Equity

Assets = Liabilities + Owner's Equity

Assets + Liabilities = Owner's Equity

Owner's Equity = Assets + Liabilities

A business owned by shareholders with limited liability

A business owned and run by one person with unlimited liability

A business owned by two or more partners

A business that pays no tax

As a business expense

As capital

As drawings

It is not recorded at all

$124{,}000$

$90{,}000$

$34{,}000$

$56{,}000$

Inventory

Premises

A five-year bank loan

Trade payables

A bank deciding whether to lend

The owner or manager

The tax authority

A supplier deciding whether to sell on credit

To decide the colour of its logo

To record the business's transactions for it

To judge profitability and the ability to repay before lending

To set the prices the business charges

Trade payables

A bank overdraft

A bank loan

Capital

Assets and owner's equity both rise by $10{,}000$

Assets and liabilities both rise by $10{,}000$

Assets rise and owner's equity falls by $10{,}000$

There is no effect

They are exactly the same thing

Bookkeeping is the routine recording; accounting also summarises and interprets the records

Accounting only records, while bookkeeping interprets

Bookkeeping is only for companies, accounting only for sole traders

They rise by $5{,}000$

They stay the same

They fall by $5{,}000$

They fall by $10{,}000$

Trade payables

A bank overdraft

A five-year bank loan

Inventory

$22{,}000$

$18{,}000$

$40{,}000$

$58{,}000$