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

The original capital deposited or invested in a business is called the ______________.

Revenue

Asset

Liability

Owner's Equity

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Verified step by step guidance

Understand the concept of Owner's Equity: In financial accounting, Owner's Equity represents the original capital deposited or invested in a business by the owner(s). It reflects the owner's claim on the assets of the business after liabilities are deducted.

Review the definitions of the other options: Revenue refers to income generated from business operations, Assets are resources owned by the business, and Liabilities are obligations owed to external parties.

Identify the relationship between Owner's Equity and the accounting equation: The accounting equation is expressed as Assets = Liabilities + Owner's Equity. This shows how Owner's Equity fits into the financial structure of a business.

Recognize that Owner's Equity is the correct answer: It is the term used to describe the initial investment made by the owner(s) into the business, which forms the foundation of the business's financial position.

Apply this understanding to similar problems: When asked about the original capital invested in a business, always consider Owner's Equity as the correct term unless specified otherwise.