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Worksheet - The Accounting Equation

The worksheet provides an introduction to the accounting equation, detailing its definition and the relationship between assets, liabilities, and capital. It includes exercises for identifying elements, balancing the equation, analyzing transactions, and understanding the importance of maintaining a balanced accounting equation. Additionally, it features a challenge question and a self-assessment for gauging understanding.

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denjb2009
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220 views2 pages

Worksheet - The Accounting Equation

The worksheet provides an introduction to the accounting equation, detailing its definition and the relationship between assets, liabilities, and capital. It includes exercises for identifying elements, balancing the equation, analyzing transactions, and understanding the importance of maintaining a balanced accounting equation. Additionally, it features a challenge question and a self-assessment for gauging understanding.

Uploaded by

denjb2009
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Worksheet: Introduction to the Accounting Equation

Name: ___________________________________________ Date: ______________

Instructions:

1. Read the questions carefully.


2. Fill in the blanks or choose the correct option.
3. Show your work where necessary.
4. Write neatly and legibly.

1. Define the Accounting Equation:

The accounting equation is a fundamental concept in accounting. It represents the


relationship between a company's assets, liabilities, and capital. Write down the accounting
equation.

Accounting Equation: ________________________________

2. Identify the Elements:

Classify the following items as assets (A), liabilities (L), or capital (C).

 Office furniture
 Bank loan
 Accounts receivable
 Common stock
 Cash
 Rent payable

3. Balance the Equation:

For each of the scenarios below, calculate the missing element (assets, liabilities, or capital)
to balance the accounting equation.

a) Assets = $25,000 and Liabilities = $10,000. Find Capital.

Equity = ________________________________

b) Liabilities = $6,000 and Capital = $15,000. Find Assets.

Assets = ________________________________

c) Assets = $50,000 and Capital = $25,000. Find Liabilities.

Liabilities = ________________________________
4. Transaction Analysis:

Analyze the following transactions and determine how they affect the accounting equation.
Use "+" for an increase and "-" for a decrease.

a) The company borrows $8,000 from a bank.

Assets _____ Liabilities _____ Capital _____

b) The company purchases equipment for $12,000 on credit.

Assets _____ Liabilities _____ Capital _____

c) The company receives $5,000 from a customer for services provided.

Assets _____ Liabilities _____ Capital _____

5. Conclusion:

Explain why it is essential for a business to maintain a balanced accounting equation.

6. Challenge Question

Create a transaction of your own and analyze its impact on the accounting equation.

Transaction: ____________________________________________

Assets _____ Liabilities _____ Equity _____

7. Review:

What is the main purpose of the accounting equation in business?

 A. To calculate profits
 B. To track the number of employees
 C. To balance financial statements
 D. To record all expenses

Select the correct option: ____ (A/B/C/D)

8. Self-Assessment:

On a scale of 1 to 5, rate your understanding of the accounting equation after completing this
worksheet (1 = not clear, 5 = very clear).

My understanding: ____

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