Equations

Question 1

Assets = labilities + equity
Assets: items the business owns or controls (examples: cash, furniture, land)
Liabilities: hers the business owns or controls (examples: accounts payable, notes payable, salaries payable)
Equity: stockholders’ claims to the assets through contributed capital and retained earnings (examples: commons stock, dividends, revenues, expenses

Answer 1

Accounting equation

Question 2

Extended equation

Answer 2

Assets = liabilities + common stock + revenues - expenses - dividends