Accounting Equation Essay ACC/300 Lucinda Degarmo November 30, 2015 Professor Brandy Havens The accounting equation is a simple formula used to measure a company’s financial position. There are three elements that make up an accounting equation; Assets, Liabilities, Equity. There are two types of accounting equations, one for a sole proprietorship and one for a corporation. The accounting equation used for the sole proprietorship is as follows: Assets = Liabilities + Owner’s Equity
Words: 447 - Pages: 2
There are numerous aspects to the accounting equation and each has its own set of criteria. In order to maintain proper balance of the account equation, assets equaling liabilities plus shareholder’s equity there are several things to consider which include recordable transactions and financial statements. A transaction is any event that has an impact on the financial statements of the business. In order for a transaction to be recorded it must result in assets equaling liabilities plus shareholder’s
Words: 372 - Pages: 2
explanation of the function of each element in the accounting equation, using 100 to 150 words. There are many different rules, regulations and requirements in accounting. However it does not matter how complex an area of accounting may look because accounting is based on one elemental principal which is Assets = Liability + Owners (shareholder) Equity. The key to remember is in any transaction there is always at least two sides and each side of the equation always stays balanced with each other. An
Words: 251 - Pages: 2
Accounting Equation It is necessary to understand the accounting equation to know and understand the components of a balance sheet. The accounting equation is simply stated assets – liabilities = Shareholder equity and is necessary to balance the books of a company. The accounting equation is best understood in the balance sheet. The balance sheet essentially shows how much money the company has, how much it owes, and what is left for the stockholders. There are many ways that the accounting
Words: 720 - Pages: 3
The Accounting Equation Sevara Smith ACC/300 February 11, 2013 Rena Ballot The Accounting Equation The basic accounting equation is, assets are equal to liabilities plus stockholders equity. The assets in the equation are the resources owned by a company such as cash, inventory, fixed assets, and accounts receivable. The liabilities are the debits and obligations of the business, the amounts owed to creditors. The stockholders’ equity is the claim the owners have to assets. The stockholders’
Words: 492 - Pages: 2
Accounting Equation ACC 300 April 28, 2014 Accounting Equation The accounting equation is an important part of a financial statement. It gives, at all times, proper information because it gathers the appropriate numbers that explain a company’s assets. A balance sheet portrays the financial situation of a company at any given point. The accounting equation is known as: Assets equals Liabilities plus Owner’s Equity. Assets refer to the resources that the business owns, such as accounts receivable
Words: 556 - Pages: 3
Accounting Equation Paper HH ACC/300 October 19, 2015 Douglas Hartman Accounting Equation Paper Whether the size of the organization is big or small, this organization must deal with financial statements; such as transactions coming in and transactions coming out that are going to impact the organization’s financial standing. In all the organizations, the accounting department plays a major role to ensure the organization’s succeed. The key role of the accounting department is to inspect
Words: 483 - Pages: 2
These are the two major piece of legislation discussed in the Senate yesterday. CHARTER BANK LEGISLATION The Senate Budget and Appropriations Committee heard testimonies from government officials on a bill that would allow the government to set up the charter bank — named the Territorial Bank of American Samoa. While there was support of the bill from some senators, others also cautioned the government to trend carefully into getting such financial institution up and running until all pros and
Words: 516 - Pages: 3
credited, the revenue account is increased. 7. The normal balance of all accounts is a debit. 8. Debit and credit can be interpreted to mean increase and decrease, respectively. 9. The double-entry system of accounting refers to the placement of a double line at the end of a column of figures. 10. A credit balance in a liability account indicates that an error in recording has occurred. 11. The dividends account is a subdivision of the retained
Words: 1114 - Pages: 5
Accounting is a formalised information system of recording economic events in the company that helps to obtain, process and present information as well as supports decision-making. Main reasons why it is necessary for the company to keep accounting records is to identify how much profit or loss the business has made, how much money the firm owe to someone else and how wealthy they company is. Nevertheless, the fundamental objective of accounting is to provide information for decision-making.
Words: 563 - Pages: 3
