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

In the context of the fundamental accounting equation, what is a 'balance brought forward'?

A new transaction recorded at the beginning of an accounting period.

The ending balance of an account from a previous period that is carried over as the starting balance for the new period.

The total of all credits in the trial balance.

A correction made to adjust errors in the previous period's accounts.

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Verified step by step guidance

Understand the fundamental accounting equation: Assets = Liabilities + Equity. This equation is the foundation of financial accounting and ensures that the accounts are balanced.

Recognize that 'balance brought forward' refers to the ending balance of an account from a previous accounting period. This balance is carried over as the starting balance for the new accounting period.

Identify the purpose of 'balance brought forward': It ensures continuity in accounting records by transferring the previous period's ending balance to the current period.

Distinguish 'balance brought forward' from other terms: It is not a new transaction, a total of credits, or a correction for errors. Instead, it is a direct carryover of the previous period's ending balance.

Apply this concept in practice: When preparing financial statements or ledgers, ensure that the 'balance brought forward' is accurately recorded as the opening balance for the new period to maintain consistency in the accounts.