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 of the following does NOT accurately represent the fundamental accounting equation?

Owner's Equity = Assets - Liabilities

Assets - Liabilities = Owner's Equity

Assets = Liabilities + Owner's Equity

Liabilities = Assets + Owner's Equity

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Verified step by step guidance

Step 1: Begin by recalling the fundamental accounting equation, which is: Assets = Liabilities + Owner's Equity. This equation is the foundation of double-entry accounting and ensures that the balance sheet remains balanced.

Step 2: Rearrange the fundamental accounting equation to verify the accuracy of each option provided. For example, subtract Liabilities from both sides to derive Owner's Equity = Assets - Liabilities.

Step 3: Similarly, rearrange the equation to check if Assets - Liabilities = Owner's Equity. This is valid because it is another form of the fundamental accounting equation.

Step 4: Analyze the option 'Liabilities = Assets + Owner's Equity.' Rearrange the fundamental accounting equation to see if this is mathematically possible. Subtract Owner's Equity from both sides, and you will find that this does not align with the fundamental accounting equation.

Step 5: Conclude that the option 'Liabilities = Assets + Owner's Equity' does NOT accurately represent the fundamental accounting equation, as it contradicts the established formula.