Chapter 2, Problem 2.2AP

To determine

Accounting equation

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:

$\boxed{\text{Assets = Liabilities + stockholders’ Equity}}$

To indicate: The impact on the accounting equation and to ensure that the accounting equation remains in balance.