Section 1 - Instruction

You've learned the fundamental rule: Assets = Liabilities + Owner's Equity. This equation must always stay in balance. Let's practice applying this concept to different business scenarios.

Engagement Message

What are the three core components of the accounting equation?

Section 2 - Practice

Type

Sort Into Boxes

Practice Question

Let's categorize some common business items. Sort these into Assets (what the business owns) and Liabilities (what the business owes).

Labels

  • First Box Label: Assets
  • Second Box Label: Liabilities

First Box Items

  • Cash
  • Equipment
  • Inventory

Second Box Items

  • Bank Loan
  • Supplier Debt
  • Unpaid Wages
Section 3 - Practice

Type

Fill In The Blanks

Markdown With Blanks

A business has Assets of $10,000 and Liabilities of $4,000. The Owner's Equity must be $[[blank:6,000]]. The equation is $10,000 = $[[blank:4,000]] + $6,000.

Suggested Answers

  • 6,000
  • 4,000
  • 10,000
Section 4 - Practice

Type

Multiple Choice

Practice Question

A food truck buys a new grill for $2,000 cash. How does this affect the accounting equation?

A. Assets increase, Equity increases B. Assets decrease, Liabilities decrease C. One asset increases, another decreases D. Assets decrease, Equity decreases

Suggested Answers

  • A
  • B
  • C - Correct
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