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Business Finance EBK HEALTHCARE FINANCE: AN INTRODUCTIO

The meaning of accounting identity and the information provided by it. Introduction: Financial accounting can be defined as field associated with accounting wherein money is treated as a means for evaluating the performance of the economy and not as a factor of production. It comprises of a system of scrutinizing and management of money as it moves in and out of the business establishment in the form of expenses, revenue, liabilities and assets. Accounting identity reflects that assets should be equivalent to equity plus liability. It states that the equity of business stands to be the residual amount which projects the difference between liabilities and assets. The information provided by the accounting identity states that there should be a balance and left side of the balance sheet must always be equivalent to right side of the balance sheet. It also depicts that the equity can never be negative because it represent a residual claim against assets held by the business.

The meaning of accounting identity and the information provided by it. Introduction: Financial accounting can be defined as field associated with accounting wherein money is treated as a means for evaluating the performance of the economy and not as a factor of production. It comprises of a system of scrutinizing and management of money as it moves in and out of the business establishment in the form of expenses, revenue, liabilities and assets. Accounting identity reflects that assets should be equivalent to equity plus liability. It states that the equity of business stands to be the residual amount which projects the difference between liabilities and assets. The information provided by the accounting identity states that there should be a balance and left side of the balance sheet must always be equivalent to right side of the balance sheet. It also depicts that the equity can never be negative because it represent a residual claim against assets held by the business.

Solution Summary: The author defines financial accounting as a system of scrutinizing and management of money as it moves in and out of the business establishment in the form of expenses, revenue, liabilities and assets. Accounting identity reflects that assets should be equivalent to equity

EBK HEALTHCARE FINANCE: AN INTRODUCTIO

EBK HEALTHCARE FINANCE: AN INTRODUCTIO

6th Edition

ISBN: 9781567938111

Author: Gapenski

Publisher: VST

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EBK HEALTHCARE FINANCE: AN INTRODUCTIO

Ch. 4 - Prob. 1.1STQ Ch. 4 - Prob. 1.2STQ Ch. 4 - Prob. 1.3STQ Ch. 4 - Prob. 1.4STQ Ch. 4 - Prob. 2.1STQ Ch. 4 - Prob. 2.2STQ Ch. 4 - Prob. 2.3STQ Ch. 4 - Prob. 2.4STQ Ch. 4 - Prob. 2.5STQ Ch. 4 - Prob. 3.1STQ

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