AFE Quiz 15: Equity – Accounting for Everyone

Which of the following best defines equity?

Assets minus liabilities
Total assets
Total liabilities
Total revenues

Which of the following is NOT a component of owner’s equity for a sole proprietorship?

Owner’s Capital
Owner’s Drawing
Retained Earnings
Net Income

What effect does earning revenue have on equity?

Increases equity
Decreases equity
No effect on equity
Converts equity to liabilities

Which of the following decreases equity?

Owner investments
Net income
Owner withdrawals (drawings)
Revenue

In a corporation, what is the equity section of the balance sheet called?

Owner’s Equity
Stockholders’ Equity
Proprietor’s Equity
Partnership Equity

Which of the following is reported in the equity section of the balance sheet for a corporation?

Common Stock
Accounts Payable
Notes Receivable
Inventory

Retained earnings represent:

Total assets minus total liabilities
Cumulative net income minus dividends paid
Owner’s investments
Total revenues

Which of the following transactions increases equity?

Payment of expenses
Earning revenue
Owner withdrawals
Paying off a liability

Which of the following would NOT be found in the equity section of a partnership’s balance sheet?

Partner, Capital accounts
Partner, Drawing accounts
Retained Earnings
Total Equity

Which statement shows the changes in equity during a period?

Income Statement
Statement of Owner’s Equity
Statement of Cash Flows
Balance Sheet