Accounting Equation: Fill In the Blanks

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 12, 2023

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1. In accounting only events are considered.
2. is an occurrence, happening change or incident which may or may not bring any change in the financial position of the business.
3. Accounting equation is: Assets = Liabilities +
4. The excess of assets over liabilities is .
5. The obligations of the business to creditors are called .
6. When an expense is paid, the amounts of two items in the accounting equation are reduced. These are .
7. An increase in one asset either reduces another asset or increases a .
8. A decrease in one asset either increases or decreases a liability.
9. In the accounting equation, the discount received is to the owner's equity.
10. Assets - Owner's equity =
11. = Liabilities + Owner's equity.
12. Owner's equity/capital is the obligation of the business to its .
13. A transaction that does not involve an outside party is called .
14. A system in which business transactions are recorded with dual aspects is known as .
15. Assets = Equities represent .
16. should be expressed in terms of money and should bring change in the financial position of the business.
17. All the transactions where the word paid is mentioned are called .
18. events are not related to money.
19. According to the double-entry system, every transaction has parts.
20. is the basis for the formation of the Accounting Equation.

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About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.