BUSINESS ACC EXAM QUESTIONS
WITH COMPLETE ANSWERS
What are liabilities? Give some examples. - Answer-Things that you owe:
Credit card bills
Loans
Mortgage
Car payments
Accounts payable (amount of money that you owe to someone else)
What is the owner's equity? How is it calculated? - Answer-Also called capital,
owner's equity, or net worth. It is the difference of total assets and total liabilities. It
may be stated as A - L = OE or the traditional way is A = L + OE. Add up all the
value of all the assets then subtract of all the value of all the liabilities to get the
owner's equity.
Are the following assets or liabilities?
Office furniture
Land
Bank loan
House and lot
Unpaid heating bill
An amount loaned to R. Jonas
Mortgage payable
Automobile
A bank deposit - Answer-Answer key: A, A, L, A, L, A, L, A, A
Karen Lipka has assets of $150 000 and liabilities of $65 000. What is her equity? -
Answer-$85000
If all the assets of a business is worth $37 486.49 and all the liabilities are worth $11
547.80, what is the owner's equity? - Answer-25938.69
On December 31, 2016, A. Lower's accounting equation was as follows: Assets $150
000 - Liabilities $70 000 = Equity $80 000. In 2017 the assets increased $70 000,
and the liabilities decreased by $20 000. Calculate the owner's equity at December
31, 2017. - Answer-$170000
Calculate his equity.
Bank account balance is $3 650
Home is valued at $492 000
Home has mortgage of $192 360
Owns furniture and household equipment worth $55 000
Owns summer property valued at $225 000 that was bought entirely with money
borrowed from the bank. He has paid back $80 000 of loan since then.
Has unpaid bills of $4 200
Owes father-in-law M. Dupuis $50 000, which he borrowed interest free several
years ago at time he bought his home - Answer-A: 775650 L: 391560 OE: 384090
, What is a balance sheet? - Answer-A statement showing the financial position of a
person, business, or other organization.
What is the fundamental accounting equation? - Answer-Set up in the form of the
fundamental accounting equation of A = L + OE
How is the order of assets listed? - Answer-Assets are listened in the order of
liquidity (order in which assets are converted into cash)
Bank account, then supplies, then ski rental equipment, then building are from most
liquidable to least liquidable.
What is accounts receivable? - Answer-Accounts receivable can be abbreviated as
A/R
Listed alphabetically by last name.
Are customers who have purchased goods or services (on credit) who will pay at a
later date.
Usually collected within 30 days, and known as a debtor since they owe debts to the
business.
Accounts receivable is very liquidable, right after cash.
How are liabilities ordered in a balance sheet? - Answer-Liabilities are listed in the
order when they are normally paid.
Bank loan is listed before mortgage payable, since bank loan is usually paid first.
What are accounts payable? - Answer-Accounts payable can be abbreviated as A/P
They are a list of suppliers who the company has purchased goods or services from
on credit who will pay at a later date.
They are amounts owed to creditors (anyone whom the business owes money)
Individual creditors are listed in alphabetical order by last name
Typically paid back within 30 days
Usually listed at the very top of liabilities column.
Some accounting notes - Answer-Financial details about multiple assets associated
with a liability are fully disclosed.
Land and buildings are listed in the asset section at their purchase value for
example. Amount of mortgage payable owed against both assets is listed in the
liabilities section.
Providing separate value for land is more descriptive than just showing one value.
Owner's equity is listed separately from liabilities. Show the owner's name, followed
by the word "capital". This figure is the difference of assets and liabilities.
The two final totals on each side of the balance sheet are recorded on the same line.
How is heading formatted? - Answer-First line: name of the individual, business, or
other organization
Second line: name of financial statement
Third line: date on which the financial position is determined
Some more accounting notes - Answer-Write and underline subheadings for assets,
liabilities, and owner's equity.
WITH COMPLETE ANSWERS
What are liabilities? Give some examples. - Answer-Things that you owe:
Credit card bills
Loans
Mortgage
Car payments
Accounts payable (amount of money that you owe to someone else)
What is the owner's equity? How is it calculated? - Answer-Also called capital,
owner's equity, or net worth. It is the difference of total assets and total liabilities. It
may be stated as A - L = OE or the traditional way is A = L + OE. Add up all the
value of all the assets then subtract of all the value of all the liabilities to get the
owner's equity.
Are the following assets or liabilities?
Office furniture
Land
Bank loan
House and lot
Unpaid heating bill
An amount loaned to R. Jonas
Mortgage payable
Automobile
A bank deposit - Answer-Answer key: A, A, L, A, L, A, L, A, A
Karen Lipka has assets of $150 000 and liabilities of $65 000. What is her equity? -
Answer-$85000
If all the assets of a business is worth $37 486.49 and all the liabilities are worth $11
547.80, what is the owner's equity? - Answer-25938.69
On December 31, 2016, A. Lower's accounting equation was as follows: Assets $150
000 - Liabilities $70 000 = Equity $80 000. In 2017 the assets increased $70 000,
and the liabilities decreased by $20 000. Calculate the owner's equity at December
31, 2017. - Answer-$170000
Calculate his equity.
Bank account balance is $3 650
Home is valued at $492 000
Home has mortgage of $192 360
Owns furniture and household equipment worth $55 000
Owns summer property valued at $225 000 that was bought entirely with money
borrowed from the bank. He has paid back $80 000 of loan since then.
Has unpaid bills of $4 200
Owes father-in-law M. Dupuis $50 000, which he borrowed interest free several
years ago at time he bought his home - Answer-A: 775650 L: 391560 OE: 384090
, What is a balance sheet? - Answer-A statement showing the financial position of a
person, business, or other organization.
What is the fundamental accounting equation? - Answer-Set up in the form of the
fundamental accounting equation of A = L + OE
How is the order of assets listed? - Answer-Assets are listened in the order of
liquidity (order in which assets are converted into cash)
Bank account, then supplies, then ski rental equipment, then building are from most
liquidable to least liquidable.
What is accounts receivable? - Answer-Accounts receivable can be abbreviated as
A/R
Listed alphabetically by last name.
Are customers who have purchased goods or services (on credit) who will pay at a
later date.
Usually collected within 30 days, and known as a debtor since they owe debts to the
business.
Accounts receivable is very liquidable, right after cash.
How are liabilities ordered in a balance sheet? - Answer-Liabilities are listed in the
order when they are normally paid.
Bank loan is listed before mortgage payable, since bank loan is usually paid first.
What are accounts payable? - Answer-Accounts payable can be abbreviated as A/P
They are a list of suppliers who the company has purchased goods or services from
on credit who will pay at a later date.
They are amounts owed to creditors (anyone whom the business owes money)
Individual creditors are listed in alphabetical order by last name
Typically paid back within 30 days
Usually listed at the very top of liabilities column.
Some accounting notes - Answer-Financial details about multiple assets associated
with a liability are fully disclosed.
Land and buildings are listed in the asset section at their purchase value for
example. Amount of mortgage payable owed against both assets is listed in the
liabilities section.
Providing separate value for land is more descriptive than just showing one value.
Owner's equity is listed separately from liabilities. Show the owner's name, followed
by the word "capital". This figure is the difference of assets and liabilities.
The two final totals on each side of the balance sheet are recorded on the same line.
How is heading formatted? - Answer-First line: name of the individual, business, or
other organization
Second line: name of financial statement
Third line: date on which the financial position is determined
Some more accounting notes - Answer-Write and underline subheadings for assets,
liabilities, and owner's equity.
