Lesson 5: Understanding the Basic Accounting Equation

Question 1

Rule of Debit and Credit

Increase when debited; Decrease when credited

Answer 1

Debit (Left Hand Side)

Question 2

Rule of Debit and Credit

Decrease when debited; Increase when credited

Answer 2

Credit (Right Hand Side)

Question 3

Accounting Equation

Answer 3

Assets = Liabilities + Capital

Question 4

where Capital:

Answer 4

Beginning Capital
	\+Additional Capital
	-Drawing
	\+Revenue		Net Income/
	-Expenses		Net Loss

Question 5

Assets = Liabilities + Capital

Answer 5

Balance Sheet Accounts

Question 6

(Beginning Capital
\+Additional Capital
\+Net Income
(Revenue – Expenses) 
-Drawing)

Answer 6

Capital Statement Account

Question 7

(Revenue – Expenses)

Answer 7

Income Statement Accounts