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

Your financial goals are the basis for measuring the progress of which of the following?

Total liabilities only

Owner's equity in the fundamental accounting equation

Revenue recognition

Depreciation expense

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Verified step by step guidance

Understand the fundamental accounting equation: Assets = Liabilities + Owner's Equity. This equation is the foundation of financial accounting and helps measure the financial position of a business.

Recognize that financial goals are typically tied to the growth or improvement of Owner's Equity, which represents the residual interest in the assets of the business after deducting liabilities.

Clarify that Owner's Equity is influenced by factors such as net income, investments by owners, and withdrawals or distributions. Progress toward financial goals can be measured by changes in Owner's Equity over time.

Differentiate Owner's Equity from other accounting elements like revenue recognition (which pertains to recording income when earned) and depreciation expense (which allocates the cost of tangible assets over their useful lives). These are important concepts but are not directly tied to measuring financial goals.

Conclude that the correct answer is Owner's Equity in the fundamental accounting equation, as it serves as the basis for measuring progress toward financial goals.