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

If the assets of a company total $700 and its liabilities are $250, what is the amount of owner's equity according to the fundamental accounting equation?

$450

$950

$250

$700

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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 determine the relationship between a company's resources and claims against those resources.

Identify the values provided in the problem: Assets = $700 and Liabilities = $250. The goal is to calculate Owner's Equity using the equation.

Rearrange the fundamental accounting equation to solve for Owner's Equity: Owner's Equity = Assets - Liabilities.

Substitute the given values into the rearranged equation: Owner's Equity = $700 - $250.

Perform the subtraction to determine the amount of Owner's Equity. This will give you the final value, which corresponds to one of the multiple-choice options provided.