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The Accounting Environment and Equation
Quick questions on The accounting equation explained: O-Level Principles of Accounts
5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is the equation?Show answer
The accounting equation states:
What is the dual effect?Show answer
Every transaction has a dual effect - it changes at least two items by the same total, so the equation stays balanced. There are a few patterns:
What is q1?Show answer
A business has assets of \60\,000\. State its liabilities. [1 mark]
What is q2?Show answer
State the effect on the accounting equation of buying inventory for \4\,000$ on credit. [2 marks]
What is q3?Show answer
Opening equity is \50\,000\, the business makes a \22\,000\. Find the closing equity.
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