The accounting Equation

The accounting equation is assets = liabilities + owner’s equity.

Please explain the relationship between economic resources and claims to economic resources.

  • Why must this equation always balance?
  • What transactions increase or decrease owner’s equity?
  • How does net income or loss affect owner’s equity?
  • Provide an example of a transaction, applied to the accounting equation.

Be sure to cite any sources using APA style. You may use this APA Citation Helper as a guide.

 
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