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Basic Financial Statements

 Self-Paced Overview

The Accounting Equation

Assets = Liabilities + Owners' Equity

Practice Excercise

The following excercise should aid in understanding The Accounting Equation. Please answer the questions below and proceed by clicking the Show Answers button located at the bottom of the page.
1. A share of stock in General Motors that your company owns would be:
 
 
 
 
 
2. A company has $1,000,000 Owners' Equity and $75,000 in liabilities. What are the assets for the company?
 
 
 
 
3. A company has cash in the bank of $850,000, inventory of $50,000 and a building worth $100,000. These are the only assets for the company. The company has liabilities that amount to $925,000. How much is owners' equity in this company?
 
 
 
 
4. Which of the following is not an asset:
 
 
 
 
 

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