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 fundamental accounting equation states: Assets =

Equity - Liabilities

Liabilities - Equity

Revenues + Expenses

Liabilities + Equity

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Verified step by step guidance

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

Break down the components: Assets are what the company owns, Liabilities are what the company owes, and Equity represents the owner's claim on the assets after liabilities are subtracted.

Recognize that the equation ensures the balance sheet remains balanced, as every transaction affects at least two accounts, maintaining the equality of Assets = Liabilities + Equity.

Apply the equation to analyze financial statements: For example, if a company purchases equipment by taking out a loan, both assets (equipment) and liabilities (loan) increase, keeping the equation balanced.

Use the equation to solve problems: Rearrange the formula as needed, such as Equity = Assets - Liabilities or Liabilities = Assets - Equity, depending on the information provided in the problem.