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AFE Quiz 2: The Accounting Equation

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  1. Which of the following is the correct form of the basic accounting equation?




  2. If a company purchases equipment for cash, which parts of the accounting equation are affected?




  3. Which transaction will increase both assets and owner’s equity?




  4. If a company borrows money from a bank, what is the effect on the accounting equation?




  5. What happens to the accounting equation when an owner withdraws cash for personal use?




  6. If a company earns revenue and receives cash, what is the effect on the accounting equation?




  7. Which of the following would NOT affect the accounting equation balances?




  8. If a company pays an expense in cash, what is the effect on the accounting equation?




  9. When a company receives cash in advance for services to be provided later, which part of the equation increases?




  10. Which of the following is the expanded accounting equation?




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