Concept explainers
1)
Accounting equation is an accounting tool expressed in the form of equation, by creating a relationship between the resources or assets of a company, and claims on the resources by the creditors and the owners. Accounting equation is expressed as shown below:
Business transaction:
Business transaction is a record of any economic activity, resulting in the change in the value of the assets, the liabilities, and the Shareholder’s equities, of a business. Business transaction is also referred to as financial transaction.
To Indicate: The effect of each given transaction of Company HMR on the accounting equation.
2)
To Prepare: The financial statements for Company HMR for the month ended July 31, 2016.

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Chapter 1 Solutions
EBK FINANCIAL & MANAGERIAL ACCOUNTING
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