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 one of the following expressions correctly represents the fundamental accounting equation?

Assets + Liabilities = Equity

Assets = Liabilities - Equity

Assets = Liabilities + Equity

Assets - Liabilities = Revenue

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Verified step by step guidance

Step 1: Understand the fundamental accounting equation, which is the foundation of financial accounting. It represents the relationship between a company's assets, liabilities, and equity.

Step 2: Recall the correct formula for the fundamental accounting equation: \( \text{Assets} = \text{Liabilities} + \text{Equity} \). This equation ensures that a company's financial position is balanced.

Step 3: Analyze the options provided in the problem. Compare each expression to the correct fundamental accounting equation to determine which one matches.

Step 4: Eliminate incorrect options by checking whether they align with the principle that assets are funded by liabilities and equity. For example, \( \text{Assets} + \text{Liabilities} = \text{Equity} \) is incorrect because it does not balance the equation properly.

Step 5: Confirm that the correct answer is \( \text{Assets} = \text{Liabilities} + \text{Equity} \), as this equation accurately represents the relationship between these financial elements.