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 component of the fundamental accounting equation includes the total cost of owning the product or receiving the service?

Revenue

Owner's Equity

Assets

Liabilities

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Verified step by step guidance

Step 1: Begin by recalling the fundamental accounting equation: Assets = Liabilities + Owner's Equity.

Step 2: Understand that 'Assets' represent resources owned by a business, which include items of value such as cash, inventory, equipment, and accounts receivable.

Step 3: Recognize that the total cost of owning a product or receiving a service is reflected in 'Assets' because these costs are tied to the resources the business controls.

Step 4: Differentiate 'Assets' from other components of the equation: 'Liabilities' represent obligations or debts, and 'Owner's Equity' represents the residual interest in the assets after deducting liabilities.

Step 5: Conclude that the correct component of the fundamental accounting equation that includes the total cost of owning the product or receiving the service is 'Assets'.