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 is an alternate form of the fundamental accounting equation?

Assets - Liabilities = Owner's Equity

Owner's Equity - Assets = Liabilities

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 represents the relationship between a company's resources (assets) and the claims against those resources (liabilities and owner's equity).

Step 2: To derive alternate forms of the fundamental accounting equation, rearrange the equation algebraically. For example, subtract 'Liabilities' from both sides to get: Assets - Liabilities = Owner's Equity.

Step 3: Similarly, subtract 'Assets' from both sides to derive another alternate form: Owner's Equity - Assets = -Liabilities. This form is less common but still mathematically valid.

Step 4: Check the other options provided in the problem. For example, 'Assets + Liabilities = Owner's Equity' is incorrect because it does not align with the fundamental accounting equation.

Step 5: Finally, verify each option against the original equation to ensure it is mathematically consistent. The correct alternate form is: Assets - Liabilities = Owner's Equity.