Accounting equation : As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business. To explain: The reason that assets and, sum of liabilities and equity is always equal

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Chapter 1, Problem 31DQ

Summary Introduction

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

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Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

Suppose you have an investment account that earns an annual 9% interest rate, compounded monthly. It took $500 to open the account, so your opening balance is $500. You choose to make fixed monthly payments of $230 to the account each month. Complete the table below to track your savings growth. Months Amount in account (Principal) 9% Interest gained (Remember to divide by 12 for monthly interest) Monthly Payment 1 2 3 $500 $230 $230 $230 $230 + $230 $230 10 6 $230 $230 8 9 $230 $230 10 $230 11 $230 12 What is the total amount gained in interest over this first year of this investment plan?

Given correct answer general Accounting question

Answer 2

Question

Chapter 1, Problem 31DQ

Summary Introduction

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

Expert Solution & Answer

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Answer 3

Question

Chapter 1, Problem 31DQ

Summary Introduction

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

Expert Solution & Answer

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Answer 4

Question

Chapter 1, Problem 31DQ

Summary Introduction

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 1, Problem 31DQ

Summary Introduction

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

Answer 6

Chapter 1, Problem 31DQ

Summary Introduction

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

Answer 7

Chapter 1, Problem 31DQ

Summary Introduction

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

Answer 8

Expert Solution & Answer

Answer 9

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Answer 10

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Answer 11

Ch. 1 - Prob. 1DQ Ch. 1 - Technology is increasingly used to process...Ch. 1 - Identify four kinds of external users and describe...Ch. 1 - What are at least three questions business owners...Ch. 1 - Prob. 5DQ Ch. 1 - Describe the internal role of accounting for...Ch. 1 - Identify three types of services typically offered...Ch. 1 - Prob. 8DQ Ch. 1 - Why is accounting described as a service activity?Ch. 1 - What are some accounting-related professions?

Accounting equation : As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business. To explain: The reason that assets and, sum of liabilities and equity is always equal

Solution Summary: The author explains that the accounting equation is as follows: Assets = Liabilities + Equity, and the sum of capital and profits/loss earned by the business owners.

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal

Want to see the full answer?

Chapter 1 Solutions

Accounting equation : As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business. To explain: The reason that assets and, sum of liabilities and equity is always equal

Solution Summary: The author explains that the accounting equation is as follows: Assets = Liabilities + Equity, and the sum of capital and profits/loss earned by the business owners.

Accounting equation: As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business. To explain: The reason that assets and, sum of liabilities and equity is always equal

Want to see the full answer?

Chapter 1 Solutions

Accounting equation:

As per the accounting equation, the sum of liabilities and equity of business is always equal to the total assets of the business.

To explain: The reason that assets and, sum of liabilities and equity is always equal