How the accounting equation applies to businesses

Asked by maham237 @ 06/01/2021 in Business viewed by 280 People

Which of the following statements explain(s) how the accounting equation applies to businesses? Check all that apply. A. The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners. B. The equation applies to all transactions. C. The equation states that Revenues - Expenses = Assets. The relation of assets, liabilities and equity is reflected in the equation. D. The equation reflects the fact that, at any point in time, total revenues will always equal total liabilities and assets. E. The equation states that Assets = Liabilities + Equity.

Answered by maham237 @ 06/01/2021

Answer:

A, E

Explanation:

The accounting equation states that Assets is the sum of the company's equity and liabilities where assets are the resources owned by the company. Equity refers to the resource the business owes the owners while liabilities are what the creditors (third parties) are owed by the business or company. These items are the elements that make up a company's balance sheet. For the balance sheet to be balanced;

Asset must equal the total of the liabilities and equity. Hence option A is right as well as E. Option B is not right as there are transactions that may be recorded between some elements of the balance sheet and those of the P/L. For instance, training cost incurred by the business paid with cash is between an asset and an expense. For option C, Revenue - Expense gives profit and not assets. The later part of the option is however true. Option D for the same reason as C is also not true.

Able, baker, and charles are engaged in the marketing to and enrollment of beneficiaries into medicare health plans. mr. able is an independent agent paid directly by a health plan. ms. baker is an independent agent paid through a field marketing organization (fmo). mr. charles is an independent agent paid for his work by a third-party marketing organization (tmo). how do the cms compensation rules apply to these three agents?

Asked by maham237 @ 13/01/2021 in Business viewed by 2747 persons

How the accounting equation applies to businesses

Similar Questions

Chart of accounts for a merchandising business vs service business

Which of the following equations is the fundamental accounting equation

Which financial statement uses the expanded accounting equation

Accounting records of a business enterprise is required by

Accounting is the language of business true or false

How many types of business transactions are there in accounting

The financial statement that represents the accounting equation is the

All of the following apply to a business plan except

After each transaction the accounting equation must remain in balance

Investments by stockholders have what effect on the accounting equation

Personal cash deposited into business bank account journal entry

Prepare accounting equation on the basis of the following

Journal entry for personal cash deposited into business bank account

Identify the savings options and the investment options. business ownership bonds money market account promotional cd

Bernoulli's equation cannot be applied when the flow is

Most viewed questions in Business

Foolproof module 9 test answers

Interest rates are expressed as a percentage of

How to enhance knowledge regarding environmental factors through capsim?

Match the job titles with the career clusters.

A company that allows you to license software

Lupe is ready to open a checking account

Mays and mccovey are beer brewing companies

What must be marked on ready to eat bags phfs

Coq six sigma

Henry ford was the first entrepreneur to implement which strategy

Your company was recently served with a lawsuit

Case study starting a business project schedules and curves edgenuity

Which two of the four cs of credit have to do with earning potential and available cash?

The total annual expenditures on advertising in the united states