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

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

If a company's balance sheet shows total assets of $400{,}000 and total liabilities of $150{,}000, what is the amount of shareholders' equity?

$400,000

$150,000

$550,000

$250,000

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Verified step by step guidance

Step 1: Understand the accounting equation, which states that Assets = Liabilities + Shareholders' Equity. This equation is fundamental to financial accounting and helps determine the relationship between these components.

Step 2: Rearrange the accounting equation to solve for Shareholders' Equity. Using basic algebra, the formula becomes: Shareholders' Equity = Assets - Liabilities.

Step 3: Identify the values provided in the problem. The total assets are $400,000, and the total liabilities are $150,000.

Step 4: Substitute the given values into the formula. Using MathML, the equation becomes:

Shareholders' Equity = Assets - Liabilities

, which translates to

400,000 - 150,000

Step 5: Perform the subtraction operation to find the amount of shareholders' equity. This will give you the final value, which represents the residual interest in the company's assets after deducting liabilities.