Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

To determine your net worth, you should subtract your liabilities from your:

expenses

assets

revenues

equity

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Verified step by step guidance

Understand the concept of net worth: Net worth is calculated as the difference between what you own (assets) and what you owe (liabilities). It represents your financial position at a specific point in time.

Identify the components of the formula: Assets are resources owned by an individual or entity that have economic value, while liabilities are obligations or debts owed to others.

Set up the formula for net worth: Net Worth = Assets - Liabilities. This formula highlights that net worth is derived by subtracting liabilities from assets.

Clarify why expenses, revenues, and equity are not used: Expenses and revenues are part of the income statement and reflect performance over a period, not financial position. Equity is related to ownership interest but is not directly used in the net worth calculation.

Apply the formula conceptually: To determine net worth, subtract the total liabilities from the total assets. This will give you the net worth value, which reflects the remaining value of assets after settling all liabilities.