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

Which of the following is NOT a satisfactory statement of the fundamental accounting equation?

Owner's Equity = Assets - Liabilities

Assets - Liabilities = Owner's Equity

Assets + Liabilities = Owner's Equity

Assets = Liabilities + Owner's Equity

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Verified step by step guidance

Step 1: Understand the fundamental accounting equation, which is expressed as Assets = Liabilities + Owner's Equity. This equation represents the balance sheet structure and ensures that a company's financial position is balanced.

Step 2: Analyze each option provided in the problem to determine whether it aligns with the fundamental accounting equation. For example, 'Owner's Equity = Assets - Liabilities' is a rearranged form of the equation and is valid.

Step 3: Evaluate the second option, 'Assets - Liabilities = Owner's Equity.' This is also a rearranged form of the fundamental accounting equation and is valid.

Step 4: Examine the third option, 'Assets + Liabilities = Owner's Equity.' This does not align with the fundamental accounting equation and is incorrect because it misrepresents the relationship between assets, liabilities, and owner's equity.

Step 5: Confirm the fourth option, 'Assets = Liabilities + Owner's Equity,' which is the standard form of the fundamental accounting equation and is correct.