Accounting Equation : Accounting equation refers to the equation which is based on the double entry system of accounting. This implies that if there is a change in the assets of the entity, there will be a corresponding effect on the liabilities or owner’s equity of the entity also. The accounting equation is as follows: Assets = Liabilities + Owner's Equity Assets: Assets refer to those resources that an organization owns, against which the organization derives a value in the future. Liabilities: Liabilities refer to the debts owed by an organization towards the parties from whom the amounts are borrowed. Owner’s Equity: Owner’s equity refers to an amount raised from the public in order to finance the business of a company. The equity holders are referred to as the owners of the business. To Determine: The effect of given transaction on the basic accounting equation is recorded appropriately or not.

Question

Want to see the full answer?

Answer 1

Question

Chapter 1, Problem 18Q

To determine

Accounting Equation: Accounting equation refers to the equation which is based on the double entry system of accounting. This implies that if there is a change in the assets of the entity, there will be a corresponding effect on the liabilities or owner’s equity of the entity also. The accounting equation is as follows:

Assets=Liabilities+Owner's Equity

Assets: Assets refer to those resources that an organization owns, against which the organization derives a value in the future.

Liabilities: Liabilities refer to the debts owed by an organization towards the parties from whom the amounts are borrowed.

Owner’s Equity: Owner’s equity refers to an amount raised from the public in order to finance the business of a company. The equity holders are referred to as the owners of the business.

To Determine: The effect of given transaction on the basic accounting equation is recorded appropriately or not.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Star Company incurred and paid the following costs for research and development activities: Material used from inventory $ 60,000 Wages and salaries 85,000 Allocation of general and administrative costs 25,000 Depreciation on building housing multiple research and development activities 30,000 Machine purchased for research and development project that has no future alternative uses 35,000 Total $235,000 If Star includes all these costs in research and development expense, including the entire cost of the machine with no alternative future uses, which of the following would be included in the journal entry?

Foreign currency translation—Comprehensive income A U.S.-based parent company acquired a European Union–based subsidiary many years ago. The subsidiary is in the service sector, and earns revenues and incurs expenses evenly throughout the year. The following preclosing trial balance includes the subsidiary’s original Euros-based accounting information for the year ended December 31, 2022, immediately prior to closing the company’s nominal accounts into the corresponding balance sheet accounts. It also includes the information converted into $US based on the indicated exchange rates: $US Conversion Weighted- Debits (Credits) Euros Current Average Historical Monetary Assets € 120,000.00 $144,000 $147,600 $156,000 Nonmonetary assets 480,000 576,000 590,400 624,000 Monetary Liabilities (60,000) (72,000) (73,800) (78,000) Nonmonetary liabilities (300,000) (360,000) (369,000) (390,000) Contributed capital (144,000) (172,800) (177,120) (201,600) Retained…

Tommys so books on leo July 21 year-end. The company does make eerless crue for Inverses ancage de ke year-end. On June 30, 2007, the Recall cours kolonce à 304,400 Now Reclude she folowing Dute Maker Face Value Tar Maturity Data R Apt C 85,000 90 day July 20 May 15 ya 7,000 July24 Car 10,000 December During Julhe following recom July Modes of $4,300 on Toorak edece 165700 un Vrede cord. The cred card recharge la 26. 20 Recall 24 (a) Journalize the July wonde July designery for ccrued in recevable coming 250 days for exams.com of goods sold edit account titles are automatically indented when amo Account Titles and Explanation Date Debit Credit Textbook and Media List of Accounta