Explanation Transaction: The economic events which bring about any changes in the financial items of a business and can be measured in the monetary units is referred to as a transaction. Accounting equation : Accounting equation is a concept expressed in the form of equation, which creates a relation between resources or assets of a company and claims of resources to creditors and owners. Fundamental accounting equation is expressed as shown below: Assets = Liabilities + Stockholders' Equity Assets = Liabilities+ { ( Common stock ) + ( Revenues–Expenses–Dividends ) } Debit and credit rules for recording transactions: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts

5th Edition

ISBN: 9780134728858

Author: Kemp

Publisher: PEARSON CO

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EP FINANCIAL ACCOUNTING-MYACCOUNTINGLAB

Ch. 1 - The text states that accounting is the "language...Ch. 1 - Would you describe accounting as primarily a...Ch. 1 - Prob. 3DQ Ch. 1 - What are some reasons why accounting has adopted...Ch. 1 - What are some of the uses of financial statements?Ch. 1 - Prob. 6DQ Ch. 1 - Prob. 7DQ Ch. 1 - How is the accounting equation affected by each of...Ch. 1 - In what order should the financial statements be...Ch. 1 - Which financial statement would be most useful to...

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Record the transactions using accounting equation

Solution Summary: The author explains the accounting equation, which creates a relation between resources and claims of resources to creditors and owners.

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