Accounting equation – Fill in the blanks

1. Accounting equation is: Assets = Liabilities + .

2. The excess of assets over liabilities is .

3. The obligations of the business to creditors are called .

4. When an expense is paid, the amounts of two items in the accounting equation are reduced. These are .

5. Increase in one asset either reduces another asset or increases a .

6. Decrease in one asset either increases or decreases a liability.

7. In accounting equation, the discount received is to owner's equity.

8. Assets - Owner's equity = .

9. = Liabilities + Owner's equity.

10. Owner's equity/capital is the obligation of the business to its .

11. The owner takes some cash from the business for his personal use. The affected items of the accounting equation are .

12. If total assets are $75,000 and total liabilities are $25,000, the amount of owner's equity is .

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