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 best represents the expanded accounting equation?

Assets = Liabilities + Owner's Capital + Revenues - Expenses - Drawings

Assets = Liabilities + Owner's Equity

Assets + Liabilities = Owner's Equity + Revenues

Assets = Liabilities - Owner's Capital + Expenses

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Verified step by step guidance

Step 1: Begin by understanding the basic accounting equation, which is Assets = Liabilities + Owner's Equity. This equation forms the foundation of financial accounting.

Step 2: Expand the basic accounting equation to include the components of Owner's Equity. Owner's Equity is typically broken down into Owner's Capital, Revenues, Expenses, and Drawings.

Step 3: Recognize that Revenues increase Owner's Equity, while Expenses and Drawings decrease Owner's Equity. This leads to the expanded accounting equation: Assets = Liabilities + Owner's Capital + Revenues - Expenses - Drawings.

Step 4: Compare the given options to the expanded accounting equation. The correct representation should include all components of Owner's Equity (Capital, Revenues, Expenses, and Drawings).

Step 5: Eliminate incorrect options that do not align with the expanded accounting equation and select the correct one: Assets = Liabilities + Owner's Capital + Revenues - Expenses - Drawings.