the-accounting-equation-is-expressed-as-________-a-assets-liabilities-owners-equity-b-assets-noncurr

Question

The accounting equation is expressed as ________.
A. Assets + Liabilities = Owner’s Equity
B. Assets – Noncurrent Assets = Liabilities
C. Assets = Liabilities + Investments by Owners
D. Assets = Liabilities + Owner’s Equity

Puneet Prajapati · Accepted Answer

because let&#x27;s start of a solution. Okay? So before understanding them main solution of the problem, they will understand the accounting accretion. Okay. Sorry what the accounting equation says. Okay, so what is it about in question? A six. Minus liabilities. Ik wisdom Older. Okay, this is what our accounting question sees. No. What is the meaning of accounting? Question. We will understand it. Let&#x27;s suppose you have, ah, business off selling foods and beverages to your customers. Okay, Now what happens? One of your customers frequently buys food and beverages from you and says that I will pay you a terrible regulator. So what will happen? Do you have a receivable against that food and various that has been sold sold to that customer? Okay, Now, let&#x27;s suppose you have sold $300. Okay? $3000 off force and beverages to person over a period of a month or over a period of 23 months. Okay, whatever. But a sex are those amount which are recoverable former customers. Okay. With John recoverable from your customers. Know what happens due process or to make that saleable products to your customer, you first have to buy raw materials from your from your suppliers. Okay, so you have purchased raw materials from your supplier. But what happened? You have not paid them. You also you want to say that I will pay You did that. I will be you. So that it is, uh, being leaders and receiving leaders. That mostly happens in every type of witness. Okay, He won in the case off services industry. Also, manufacturing industry. Also, this happens most of the times. So however, you have purchased raw material off $2000 and you as not you have not beat them. Okay? Know what happens? Do you have I was owners equity. Okay, we have on other owners. Equity of $1000. My $1000. Just a few 1000 minus 2000. They get $1000. Okay, so we haven&#x27;t district a meaning off $3000. We have understood the meaning of $2000. These are recoverable from customers. And these are people to supply us. What? What is the meaning of owners Equity? The meaning of winners equity is after being off all the liabilities from the amount of sex. Okay? After their collection, after the election off recoverable amounts from customer. And after paying off the liabilities we have generated that basically what I usually saved, they could be from business. It&#x27;s that big of a war for the owner of the business. OK, so this is the amount that one every take away from the business. So we have understood the meaning of Essex, the camp English in next come the autumn in solution. So we have a set minus liabilities equals stool, or is he know what happens in mathematics? Did you have in this room that whenever you will make are you will pass on this item level? It is item onto right inside of the equation. What will happen? It will become like this. Okay. Owner&#x27;s equity. Vai there. So by that minus and has been removed because it has been move right inside of the question. Okay. Is that clear? So this is our main solution to our portion and the choice, The choice of the present, this equation you very well know this. Okay, So the current choices be which says that which says that a SEC equals two liabilities plus owners equity. So the main solution of it for other problem is choice the Okay, That&#x27;s all part of a solution. Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current solution to win something. But first of all, before the example, we draw the first of all, understand the actually question behind this solution and works it. What is it? Let&#x27;s see. Sits minus liabilities. Equal. Get it? Actually, capital is used in traditional needs as a loan in relation, sophisticated. But just to quit, you stop already. Our date is Oh, precise differences. They have presides differences between stockholder&#x27;s equity and capital. However, we will understand. Listen later when we will face the problems. Okay, so we have our question said minus liability was to stop really pretty no electricity. Understand this equation, Tau Example. Because the visit will be a little complex at getting states to understand this. No, let&#x27;s see. Mr Green has business off blue business off and currently it has. It&#x27;s it&#x27;s oh, dollars I did and liabilities off. Daughter 200 through there licked Lewis. So what do we have? We have Mr Ri, which is dealing in business off clothing, like chasing the flutes from locally from Lydia are outside of the country importing, you know, a good material. Some outside of the country, local boundaries and selling the setting, the builds and about my beating. In such business, Mr Lee has a community sets off about 500. These events will be in terms off gash. Know what is in a second? That&#x27;s it is in a mountain which a person or an entity is likely to the sea. Our is expecting to receive in some later point in time. So a sex could be gash, which is which is guaranteed with the current, which the entity it&#x27;s currently holding in its bank guard in, you know, cash reserves or doctors. It is that the person who would like you to pay the person for whom subject is that considered as sex. So presently, Now, what are the liabilities? Lab, please. Uh, those are mom&#x27;s, which we have to be. Who? Other person. Like participles. We have predators or shock them. Decked Logan Back short, Longtime necked. These are other financial obligations which B which we have to pay off during the lifetime of the business. I love What? The accounting. A question in place. Let&#x27;s understand this. Also, a sick Linus like beauties equally do stock no water. What is the amount of dissecting never take something. What is the example of liabilities? 100. Now, what is this? Top of very pretty hours. So we have understood the meaning. Love This one, This one? No, we really understand the meaning of this. And after that, we will come to the conclusion that how many type off combinations we can produce with this question, So that will be able to go on. Push. So what is this top of that? It would be It is. It is the amount there, the business man whores in the business as is, huh? Only money was realization depends upon liquidation. Liquidation? Oh, business having bean there done such definition. It is simply the amount that deck mystery that Mr Three Wars in the business as his own darts a simple list. Thank you, Mr V. As a community of equity, wealth equally means on his own. Mr. Ray has a commuter belt off dollars. 300 in his business. After being off the liabilities from the A community, a sense and what it would be the insects. But maybe gash dictators, order receivers or what type of bank deposits he had so out after the bingo after thing off celebrities. Dollars. 200 from the assets. Whatever be the long left? After such activation off of the exits, whatever will be left will be actually beautiful to Mr as a business. And this will be start hold equity. So no. So the correct solution. So the correct choice. So the correct choice off off problem 13 is deep. Howdy. Because, Indy, this is I send less liabilities equal to stock up. It took it. So this is about the Actually, this is the actual question is that&#x27;s it minus liabilities? Because just talk it is. And from this a question. We cannot be right this equation in anything so that this white this option is not today and that this does not represent the actual impression. So the current choice a problem dirtiness. And thanks for the

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the solution with an example. But before the example, you troll, let&#x27;s first draw the basic question. What we have in the question. So doctors sits my list. Library fees, quest. He quit. No, this is this. A question is known as this equation is known as accounting equation, it states that they will be the bill effect off each transaction on the equation. This definition, we will understand in detail whenever we will face the numerical problem later. Toe accounting Question. This is the basic accounting question we have on through this. Different types of combination can be produced, and based on that, our current problem, which is problem for Bean, is based. So let&#x27;s try to understand this in with more with an example. Festival sample Mr. R has business Oh, dealing in instruction Medea. And he has. But you omitted a sex off daughter 1000 and liabilities off 500. So based on the question we have just found, we can deny that our equity will be off $500. Doctors 1000 dollars six minus $500. Liabilities will be quite Do I wondered $500 of equity so based on that weekend did attacked we can bribe. What is the amount of equity that is attributable to Mr R out of his business looked but vehicle actually building with a different problem. The different problem is that how how many nights off combination we can drive from the basically called the question. So I will try to right on the dog. What is the basic accounting equation? And based on that, I will try to drive the possible combinations out of it by replacing the variables left to the right side, right up on a train side of the equation and left inside of liquid so that we can derive our solution. Look detailed analysis. So out of this first possible combination is, then we will transfer liabilities right inside. What you laugh, it could be. And what is this minus sign and this minus and you&#x27;ll become Let&#x27;s sign off liabilities. This is what we can deny from the basic mathematics. Okay, this is the first possible combination. Then the second possible combination will be as X minus equity. So we are getting equity on the left hand side of the equation. So it&#x27;s inherent. Plus sign will become minus sign. So that&#x27;s why I have not done it explicitly but done within the then, then, by drawing the marks that how but how they could design has changed by getting it on the left inside. So So I said, minus equity, it will do liabilities. No liberties will have a plus sign because on the left side, exciting minus sign. But But then I will shift the liabilities to that. Inside, it could become a positive sign. Now, the third combination will be we have done for the assets. We have them for the liabilities. And now it, uh, times for in the first equation the basic question we have. We can also transferred it to here because we have They gonna target variable of asset on the left inside the single variable. Actually, and we have taken laboratory. There&#x27;s a target variable. Now we will take it. Could be as a target video and how we were gonna have already, Cody, just a sec, minus liabilities. So I&#x27;ve got a solution out of it. Is what? Which is the which does not represent the actual combination of the miss equation. So the correct choice for four problem for Dean is See which says it&#x27;s soc is actually not a correct representation off. Probably questions. So that does have a distribution for the current potion. And based on of an example. Legs do this also. So Mr Ri has $1000 off a six. Okay, then $500 off elaborate please. And $500 off. It could be. So First. Understand this one. Let&#x27;s say we have. We are likely to receive $1000 from a customer who we have supplied material the construction material. So we are We have sex off thousands dollars. Did she have to deceive? But we also have toe pay someone. Okay. We also have toe pay someone so that we have liabilities off 500. Okay, so it could be portion that this equally portion. What does it do know ignored that. What is the amount that is attributable to a business person out of his business when all the library tease will be paid off from the essence? If let&#x27;s suppose there is 1000 off these $1000 of business and there&#x27;s $1000 of liberties so they could be component will be zero. Nothing. So the businessman will not be able to draw any tape off. You know, cash drinks from the business for his personal use of that. But for the current solution, our answer will stick to Oh, I see. So tank.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current solution. But before moving with the institution, we will start with introduction off working capital, and then we will move you over the institution. Okay? No. What is working Capital school. We will go with some technicality. Okay? And to explain the technicality, we will move through. Oh, it example to make the formula, or we can say equation more clear. Are you okay? So don&#x27;t be confused with the formula. It will be more clear. So there is a specific reason that why am I that I am writing the current assets with the general current liabilities with Take their Okay, So this is the formula for working capital. Okay? However, you can write it down for your future reference also, but in orderto make it movie. And we will understand that why the formula is like this. So let&#x27;s suppose. Okay, first of all, I will discuss the current visits. So current basics are those of sex or weaken Said doors, those investments or those amounts which are recoverable from our customers. Okay. Within running it. Okay, within one year. Like, let&#x27;s suppose you are dealing in selling furniture. Okay, Now your customer say, Is that okay? I have pushes definition, but I will pay you the amount and within a within a year. Okay, so it&#x27;s Ah, it&#x27;s a trustworthy customer. So you agree to the terms and conditions which he has or she has laid down. Okay, not that amount will be considered as current assets. So let&#x27;s suppose you have sold different nature off $500. So let&#x27;s maintain the consistency. Answer. Okay, let&#x27;s suppose you have soared the furniture of $500. Now what happens of even understand the library, despite on. So come, let&#x27;s come to current liabilities. Well, no. Whatever&#x27;s who processed the main furniture productive. Okay, which was sold to the customer. You have purchased the good looks from a supplier. It is very, very obvious that Rupert, news off a nature in saleable condition. Okay, who make the good Lord&#x27;s into saleable condition? First of all, you have to bring the vomiting into your fairgrounds. Okay, So now you have purchased book gloves from a supplier. And you also said that my total business it runs on credit like the customer used to pay me with another here, so it means to you. It implies that I am also trustworthy. Customer off you. So I will be so I will pay you in one years time. When will been my customers will pay off me. Okay, so the supplier is a very good man and he agrees to the conditions that you have made A for. Okay, Now you have purchased Would loves off $300. Okay, so what is the working capital here? We have We have a capital off $200. Okay. So that it is easy to calculate the working capital, Howard, The understanding the current assets and current liabilities is the most important, and forward by day. Most important is that it working capital provides. But how much liquid assets the company&#x27;s having liquid desserts means Okay, liquidity means easily convertible into cash. Okay, that in how much time? The the current dissect will be able to be converted into, I guess. Okay. No working capital provides the liquidity. Okay, right. See overview off liquidity or the company? Like how much? The current basics the company&#x27;s holding in orderto pay off the liabilities. Let&#x27;s suppose our customer, our customers, says that Oh, I&#x27;m sorry that I will not be able to pay you in one year. I will pay you next year. Now what happens? The customer becomes a liquid. Okay. You will not be able to recover such a month. Such $500 amount from their customers. Okay, now it is a bag. It is a bad measure that the entity is is having in liquid current assets that cannot be converted into cash easily, like within a year. Okay, so that is right. It provides the liquidity majors. Okay against the entity. So what? We have so as our correct choice. What? We have denied it. What type off were type of overview. Does the capital is the working capital here? Liquidity. Okay, so the correct choices see? Okay, so that&#x27;s all I have a solution, that&#x27;s all for our situation. We have. How are you going to write it down? This one So that you will be able to go. Many men let it. What? Few chicken faces. That&#x27;s all for our solution. Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current solution. So first of all, people understand veto. But in sheet ordered by back vividly drives former Okay, to understand the or good idea Main solution. OK, so it is the it refers to the stick mend off. Financial was issue. We&#x27;ll be here by an entity at the end off each year. Okay, so what we have, Okay, it is a statement of financial position. So it is the most in Bordentown in their definition. Okay, It is prepared by every entity like the introduced average for profit motive or and do the established for non profit motive, like for charity purposes. So the those types of entity also prepare financially balance sheet. Okay. And that I&#x27;m not easier now. What is watches? Meaning the end of each of means. Like first. Generally who? 2020 Who? 31st December 2020. Okay, No. Now we have industrial that. What is the balance sheet? No legs. Doors for mitt. Okay, get that clear. Idea that Lord, the question is asking about us. Okay, So, balance sheet. But the actual vomit is that 31st December. That would okay, so legs don&#x27;t right cross Let&#x27;s, like 2020 or we can see 2019 because we have not been like that. I dont drink tea yet, so I&#x27;m currently drawing the traditional form it off balance sheet. Please do not be confused with that. Okay, but make sure that you remember that items. Okay? Okay. You make sure you remember the item as well s the summation part. And what? However, the submission parties in order living dead. The summation part is nothing. And show you first. Make sure that you do. You remember the terms a sex owner&#x27;s equity and liabilities. Okay, The summation part is just that this torture will always be equal. Do this total. Otherwise the balance sheet per patient is not correct. Okay, this is all the summation part talks about. And as far as dictums organs concern the s exile, mostly the cash balance. Headed into the level are the machinery which is used in producing the products. Okay, so these will be considered as a sex owners. Equity means that how much capital the owner has invested in the company to run the business or who started business. The liabilities are the amount which we have, which the entity has to pay to some craters or depositors or from whom the advance has been taken. OK, so that those amounts will be considered as liabilities. So we have. You can have a bill into definition water by that B. M. Gorondi. We employ the former balance sheet. Now we&#x27;ve been Now we have been ivy. Correct choice for a problem. Okay, So what is ever correct choice? It&#x27;s a okay vision, Klores, Or like them stated in the second Chief. Except Okay, so that&#x27;s all for our solution. Thank you.

Puneet Prajapati · Answer

Okay, so let&#x27;s understand the current problem. How to drive the solution. Okay, First of all, we will draw our basic accounting question which will help us in diving. The solution, okay, is it&#x27;s minus liabilities. He was still equity. Okay, so this is the basic accounting question we have in front of us. But what does this accounting question says? Let&#x27;s understand. Suppose you are in business of a restaurant making making very, very grateful delicious to the to your customers. Okay, so you have, you know, sorted. And you have also on land delivery segment to your customers. But sometimes what happened? Your customers say that I really, really I will pay you after some week or a month. Let&#x27;s suppose in that case also, however it is not. It is not possible in real boy. But let&#x27;s suppose for our example. Okay, so suppose your five customers have said that they will pay you are they will pay you off after a month. And that is the amount totaling off $10,000. Okay, $10,000. So before you sold before you sold off the foods and beverages to your customer, you will also have to buy the raw material. You know, raw material to process the actual food into the into the actual, you know, act a bill. Edible food. So you have purchase some some off the material from the suppliers. All 5000 but the among has not been paid yet. Please remember my words. The asset is the amount which you are likely to receive from your customers along it. That if you have, let&#x27;s say if you have initial cash balance off 5000 voters, that will also be considered as assets that you are actually owning. Okay, so the total assets will be $15,000. However, there there is only 5000 off level, please. Okay. The library Is that the amount which are still people? Let&#x27;s suppose you have incurred the telephone expenses for generally month off $1000. Okay, But you have come to know factory, but still and you have also Oh, you always have to pay for every expert telephone expenses. But the generally telephone expenses will be considered as your liberties nor of the celebrity by that. So because the because the time or the due date the due date for making Jen very telephone expense payment has bean passed off. So that is why the amount that which is due, which is due to be paid will be considered us liability. Okay, so what is the portion of equity? Actually, with $10,000 what is they? Could be. It is nothing, Berta. Take of it from the business in in in very, very symbolic downs. However, and Dale, we will understand this. Also that were the actually worked out, actually, components of the inquiry. But as of now, in very, very simple terms to make the question more interpret Table the cookie is a take of it from the business after being off all the ladies. Okay, Now let&#x27;s come to our question. We have understood what is the meaning off a sex. What is the meaning of liabilities? And what is the meaning off equity? Okay, Now let&#x27;s come to live with me in question, which is our, well, most concerned. Okay, so let&#x27;s most of all right, d question. So the question is asking from us that if let&#x27;s say we are likely to receive $10,000 which we have just stated. Okay, which we are. We have just stated that what type off the that we&#x27;re likely to receive $10,000 okay from other customers, which is that remote. And suppose we have libraries off $5000. So already cooties $5000. This is the peak of it. But the portion is saying like the supposed we have received 5000 from the customer who has received our four billion resurfaces. Okay, which the customer has paid $5000 to us who have received the benefit overs benefit of goods and services. So if let&#x27;s say I have to this it&#x27;s a tour. In total, I was having $15,000 bye. $15,000 at the initial level. I have. So I would like to hear $15,000. Okay, but know what happened? I have received $5000 from our customer. So what will happen? So this is the total amount we have right now in comes off amount feature which were likely to receive, plus the 5000 of the $5000 off the cash. We do have an hour cash drawer. So vehicle Dylan, the $5000 by there. So because we have received from our customers So 5000 is the amount which we have received from this from this 10,000. This one. Okay, this is the 5000 we have received. Now, if we are going to deduct the balance off the amount with which we&#x27;re likely to receive so they will be an occasion off the $5000 also. Why? That&#x27;s so Because we are receiving the cash from the customers. It is just electing effect. It will not effect any any off the element of the question right now. But let&#x27;s focus is I know it will be clear toe. Rick, you&#x27;re to most of you. But let&#x27;s understand it. In most elevated terms, let&#x27;s suppose if I have a set, okay, in next she that I will be going this minute because it would be, you know, convince him in that cheap. So I have a sex off 10,000. Okay, I have a sense of 10,000 I&#x27;m likely to receive. Okay. I&#x27;m like, you&#x27;re like you do receive $10,000. Some customer has paid, paired me off $5000 but this this amount will be reduced if the parents off the amount which were like to receive which were like to see will be reduced then against that, because there are double effect off the every financial transaction. The rules is the rules is the rule of accounting. Question. Please write it down so that you can we get a clear idea. What? I&#x27;m actually seeing the full effect off every financial conviction. Okay, so what is the double effect? First of all, David decrees in my balance of debtors that there&#x27;s that amount which from Azad the persons from which were likely to the city payment. Okay, so they will be degrees in a sex or they will be in the green in balance. Okay. And again, they would be double effect. So first affected, this seven effectively, they will receive the cash from our doctors. So that is clear. Okay, now let&#x27;s come to the basic counting, wishing so there will be no change. Buy that So because minus 5000 plus 5000 it will be both squared off. Okay? Minus plus equal to zero. 15,000. $15,000 of a six $5000 off liabilities will again come. Go $10,000. So initially it waas 15,000 minus five equals to $10,000. Let&#x27;s make it $10,000. Don&#x27;t confuse that via my going right. $10,000 in studio initial $5000 normal. That&#x27;s the case that $10,000 We have initially sex like cash, bus conductors and minus lively days. So it will be 10,000 lives. Okay, so there will be no change in the either side of the equations. There will be no change before doctors before the drug addiction situation. And that is after the damage institution. Okay, so the correct choice for problems in physics is D. Which says what? What does what does the choice de ces that neither of the site changes? Okay, decide remains constant. And this same remains constant after the transaction be ever recognized. Okay, so the correct choices problem 26 is the That&#x27;s all for the solution. Thank you.

Problem

Which of the following decreases owner’s equity? …

Problem 8 Medium Difficulty

The accounting equation is expressed as ________.
A. Assets + Liabilities = Owner’s Equity
B. Assets – Noncurrent Assets = Liabilities
C. Assets = Liabilities + Investments by Owners
D. Assets = Liabilities + Owner’s Equity

Answer

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Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting