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

According to the fundamental accounting equation, you would find assets by:

Multiplying liabilities by owner's equity

Subtracting owner's equity from liabilities

Dividing owner's equity by liabilities

Adding liabilities and owner's equity

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Verified step by step guidance

Understand the fundamental accounting equation: Assets = Liabilities + Owner's Equity. This equation represents the relationship between a company's resources (assets) and the claims against those resources (liabilities and owner's equity).

Identify the components of the equation: 'Liabilities' are obligations the company owes to external parties, and 'Owner's Equity' represents the owner's claim on the company's assets after liabilities are settled.

To calculate 'Assets,' you need to add 'Liabilities' and 'Owner's Equity' together. This is because the equation shows that all resources (assets) are funded either by external obligations (liabilities) or by the owner's investment (owner's equity).

Express the calculation mathematically using MathML:

Assets = Liabilities + Owner's Equity

Apply this equation to any given financial data to determine the total assets of a company. Ensure that liabilities and owner's equity are accurately measured before performing the addition.