
Concept Introduction
Assets:
Assets are tangible and intangible resources owned and controlled by the company as a result of past transactions, from which economic benefits are expected to the company. It includes land, machines, cash etc.
Liability:
Liabilities are obligations or payable by the company.
Equity:
Equity or capital is the investment of the owner of the company and it is the portion of the total assets that the owner of the business owns.
Revenue:
Revenue or income is the amount that the company receives from the sales of products or services.
Expenses:
Expenses are the amount that is spent by the company to generate revenue.
To Identify:
The type of account and normal balance of the given accounts

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Chapter 2 Solutions
Loose Leaf For Fundamental Accounting Principles Format: Loose-leaf
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- Can you solve this general accounting problem using appropriate accounting principles?arrow_forwardSarah is the president and general manager of the operation. Sarah has been very proactive in growing the business. She has met with her banker to discuss expanding the facilities and equipment with another $150,000 loan. Their first loan for $150,000 was secured by the industrial-size food production equipment purchased with the loan. The banker now demands an audit of the corporate financial statements before releasing another loan to the company. Sarah has offered to place the corporate account receivables up as collateral to secure the second loan. Based on revenue projections by her sister Jillian's sales team, Sarah believes that the company will not have trouble paying down the loan in a short period of time. Kim's assistant, Henry, monitors the production and shipment of Smackey Dog Food's regular line of products. Henry takes pride in his work and is involved in every facet of the operation. With only one other warehouse employee to help, Henry personally is involved in…arrow_forwardI need assistance with this financial accounting problem using appropriate calculation techniques.arrow_forward
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