Property and Financial Claims

Double entry bookkeeping and accounting are based on the fundamental premise that for each property a business has there will be an equal financial claim on that property, and that both property and financial claims are measured in monetary amounts.

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Quiz 9: Accounting Equation Exercises

Test your knowledge of the accounting equation questions with our online accounting equation quiz. There are three types of account that make up the accounting equation, asset, liability, and capital, but do you know the effect of debits and credits on each?

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Quiz 2: Accounting Equation Quiz

Test your knowledge of the accounting equation questions with our online accounting equation quiz. There are three types of account that make up the accounting equation, asset, liability, and capital, but do you know the effect of debits and credits on each?

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Basic Accounting Equation

Double entry bookkeeping and accounting is based on the Basic Accounting Equation which states that the total assets of a business must equal the total liabilities plus the owners equity in the business.

The basic accounting equation can be expanded by recognizing that the owners equity represents the capital injected into the business together with the retained earnings, effectively providing a link between the balance sheet and the income statement.

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