For those of you that know the Accounting Formula
Asset = liablitiy + Owners Equity
Which of the Following is not an Asset?
A)investment
B)Cash
C)Inventory
D)Owner’s Equity
D
It’s D
You need to study some more, though…this is a very easy question, and you will probably run into questions that are a lot harder on your tests…
[quote]D Public wrote:
this is a very easy question[/quote]
Quoted for truth.
Although every year we get at least one intern that will get this question wrong.
[quote]D Public wrote:
It’s D
You need to study some more, though…this is a very easy question, and you will probably run into questions that are a lot harder on your tests…[/quote]
lol, I was thinking the same thing.
I think he believes the equation actually means assets are liabilities and owners equity, and if that’s the case I hope it’s not to late to drop out.
[quote]countingbeans wrote:
D Public wrote:
this is a very easy question
Quoted for truth.
Although every year we get at least one intern that will get this question wrong.[/quote]
lol really? where do you work Arthur Andersen haha
[quote]Kemper1989 wrote:
D Public wrote:
It’s D
You need to study some more, though…this is a very easy question, and you will probably run into questions that are a lot harder on your tests…
lol, I was thinking the same thing.
I think he believes the equation actually means assets are liabilities and owners equity, and if that’s the case I hope it’s not to late to drop out.[/quote]
eh… if it is the first couple of weeks of 101 I can see how someone could think what you said.
OP, it’s accounting, don’t overthink it. At the stage of your question, logic & common sense are often the correct answer. Few years from now, you’ll need to think a lot more, but right now don’t overthink something like this.
EDIT: then again, if you don’t know/can’t look up basic assets, you might be fucked.
[quote]Kemper1989 wrote:
countingbeans wrote:
D Public wrote:
this is a very easy question
Quoted for truth.
Although every year we get at least one intern that will get this question wrong.
lol really? where do you work Arthur Andersen haha[/quote]
ha ha, no a small firm. And the lead recruiter misses things. My firm is still stuck on 15 years ago. All they care about are SAT & GPA from a name school. I slipped in by referral.
They don’t pay attention to the person, just the grades.
KK thanks I started my Summer Acct 101 course and i had all teh answers for the quiz besides that one i wanna ACE this class and have a Strong base for when i go further into accounting.
Just learned this equation but im wondering isn’t Owner’s Equity an Asset? Because Assets equal Liabilities and Owner’s Equity so then Technically Owner’s Equity is part of Asset right?
This equation makes no sense… Asset = liablitiy + Owners Equity; if equity goes to zero, it reduces to asset = liability which is nonsensical.
That’s can’t be a real accounting equation, or you got it wrong.
I think you mean the value of an asset = amount of equity held (a positive number) plus the liability on the asset (how much you owe, a negative number. So if you own a house with $10K in equity and -$180K liability your “asset” is worth -$170K
Here’s one to throw you for a loop. Contrary to “normal” accounting practice, inventory is a liability. It’s just junk sitting on the shelf that you sank money into. It’s not an asset until you convert it to cash by selling it, therefore it makes sense to hold as little inventory as possible. Inventory is a liability. Just don’t try saying that in accounting 101. haha!
[quote]yorik wrote:
This equation makes no sense… Asset = liablitiy + Owners Equity; if equity goes to zero, it reduces to asset = liability which is nonsensical.
That’s can’t be a real accounting equation, or you got it wrong.
I think you mean the value of an asset = amount of equity held (a positive number) plus the liability on the asset (how much you owe, a negative number. So if you own a house with $10K in equity and -$180K liability your “asset” is worth -$170K
Here’s one to throw you for a loop. Contrary to “normal” accounting practice, inventory is a liability. It’s just junk sitting on the shelf that you sank money into. It’s not an asset until you convert it to cash by selling it, therefore it makes sense to hold as little inventory as possible. Inventory is a liability. Just don’t try saying that in accounting 101. haha![/quote]
you are an idiot.
[quote]yorik wrote:
This equation makes no sense… Asset = liablitiy + Owners Equity; if equity goes to zero, it reduces to asset = liability which is nonsensical.
That’s can’t be a real accounting equation, or you got it wrong.[/quote]
Very real dude, and if you think this it’s nonsensical you certainly have zero grasp for accounting. Which is fine, it’s not for everyone.
(Here’s something to rock your world, equity also can go NEGATIVE, which is a debit balance. Oh shit, someone must have divided by zero.)
Nope not what he means at all.
You are right, excessive inventory is foolish in all cases. What constitutes excessive is different for each organization. BUT inventory is NOT, nor could it ever be by definition, a liability.
Dude this kid wants to pass, don’t put stupid shit in his mind.
[quote]optheta wrote:
KK thanks I started my Summer Acct 101 course and i had all teh answers for the quiz besides that one i wanna ACE this class and have a Strong base for when i go further into accounting.
Just learned this equation but im wondering isn’t Owner’s Equity an Asset? Because Assets equal Liabilities and Owner’s Equity so then Technically Owner’s Equity is part of Asset right?[/quote]
No. They are three different things all together.
Assets are things that provide a benefit in the future (You already paid for it.)
Liabilities are future obligations (You’re going to pay later with an asset.)
Equity (or Capital) is basically an accumulation of income & loss, and any money put into the company by stockholders/partners/owners. (It gets more complicated than this)
Don’t get hung up on the equation other than it makes everything work. All it does is make your balance sheet equal zero. It outlines what has a debit balance, and what has a credit balance.
You going to have to understand how a change in each of the three will effect the other two. But all three are three very different animals. This isn’t algebra.
Like someone else said you are just over thinking it.
LOL at the Arthur Anderson comment.
Yorik - supply chain major? lol…
A step above that is when a CIS major asked me which side was debit and credit.
[quote]yorik wrote:
This equation makes no sense… Asset = liablitiy + Owners Equity; if equity goes to zero, it reduces to asset = liability which is nonsensical.
That’s can’t be a real accounting equation, or you got it wrong.
[/quote]
That equation makes sense. For example, I start a new business and I borrow $100k.
Assets = $100k cash
Liabilities = $100k I owe the bank
Owner’s Equity = $0 (since I did not make any money)
Alright thanks for help i scored a 15/15 on my first quiz w00t! lol
Wow, OP try going to class… or studying some. Wow
Some of you are fucking morons and should think before you speak about shit you have absolutely no clue about.
If it is:
A=100
L=100
SE=0
it simply is. Mostly the equation is meant to help keep things in balance. When shit gets exponentially more complicated, a nice simple balancing equation is a lovely thing.
[quote]daneq wrote:
Wow, OP try going to class… or studying some. Wow
Some of you are fucking morons and should think before you speak about shit you have absolutely no clue about.
If it is:
A=100
L=100
SE=0
it simply is. Mostly the equation is meant to help keep things in balance. When shit gets exponentially more complicated, a nice simple balancing equation is a lovely thing.
[/quote]
… My class just started on the 8th and im Sorry if I didn’t have any prior knowledge of accounting before this class cunt.
[quote]jck524 wrote:
yorik wrote:
This equation makes no sense… Asset = liablitiy + Owners Equity; if equity goes to zero, it reduces to asset = liability which is nonsensical.
That’s can’t be a real accounting equation, or you got it wrong.
I think you mean the value of an asset = amount of equity held (a positive number) plus the liability on the asset (how much you owe, a negative number. So if you own a house with $10K in equity and -$180K liability your “asset” is worth -$170K
Here’s one to throw you for a loop. Contrary to “normal” accounting practice, inventory is a liability. It’s just junk sitting on the shelf that you sank money into. It’s not an asset until you convert it to cash by selling it, therefore it makes sense to hold as little inventory as possible. Inventory is a liability. Just don’t try saying that in accounting 101. haha!
you are an idiot.
[/quote]
True that lol.
A= L + OE is just for you to remember when doing your balance sheet for the most part. Like others have said, do not over think accounting, especially financial accounting.
I just wanted to 2nd, 3rd and 4th everyones opinion that yorik is a moron.