MODULE #4 - THE ACCOUNTING EQUATION

Question 1

Basic accounting equation

Answer 1

assets = liabilities + equity

Question 2

Shows the result of operation for a given period

revenue, cost and, expenses

Answer 2

Income statement or Statement of comprehensive income

Question 3

Financial condition/position

assets, liabilities, and, equity

Answer 3

statement of financial position or balance sheet

Question 4

changes in the capital or owners equity due to investment, withdrawals,

Answer 4

statement of owner’s equity

Question 5

summarizes cash receipts and cash disbursements

shows net increase or decrease of cash

classifying cash inf bws (receipts and cash out bws (payments)

Answer 5

statement of cash flows

Question 6

expanded accounting equation

Answer 6

Assets = liabilities + equity + income - expenses

Question 7

increase in economic benefit

Answer 7

income

Question 8

decrease in economic benefits

Answer 8

expenses