Basic Financial Accounting Assignment Equation: Problems and Solutions

  accounting assignment writing help  3rd Jun 2020

If you are struggling with financial accounting assignment equation and need professional assistance to complete task, then do not hesitate to call BookMyEssay. The firm offers best in class assignment for a range of subjects and topics. So, assignment writing help for financial accounting subject is not a big deal for them. The accounting equation builds the basics for all accounting system. The double entry accounting system is entirely based on basic accounting equation. And a simple accounting equation reveals two simple facts about a company: what the company owns and what it owes. In this page, we will talk about the accounting equation only. So, at first understand the fundamental elements of an accounting equation. The company’s financial position is measured in the mention terms: Assets – It mean what is own by the company and this include cash, inventory, accounts receivable, investments and prepaid insurance Liabilities – I means what companies owes to others and this includes loans payable, salaries, account payable, interest payable Capital – This is the difference between the assets and liabilities. The general accounting equation describes the relationship among the mention elements in the following manner,

How to Solve a Basic Accounting Equation?

The example of solving the equation using the above mentioned formula. Problem: Check out how accounting equation is satisfied after considering each of the transactions in Mr. a books Started business with capital $100,000 Solution of the problem Capital (100,000) + Liabilities (0) = Assets (cash = 100,000) Bought furniture $25, 000 Solution Capital (100,000) + Liabilities (0) = Assets (Cash = 75,000 + Furniture = 25,000) Bought goods for cash $20, 000 Solution Capital (100, 000) + Liabilities (0) = Assets (Cash = 55,000 + Furniture = 25,000 + Goods = 20,000) Brought goods from Mr. Nelson on credit $5,000 Solution Capital (100, 000) + Liabilities (Nelson = 5,000) = Assets (Cash = 55,000 + Furniture = 25,000 + Goods = 25,000) Sold goods for cash for $15, 000 Capital (100,000) + Liabilities (Nelson = 5,000) = Assets (Cash = 70,000 + Furniture = 25,000 + Goods = 10,000) Sold goods to Mr. William on credit $8,000 Solution, Capital (100,000) + Liabilities (Nelson = 5,000) = Assets (Cash = 70,000 + Furniture = 25,000 + Goods = 2,000 + William = 8,000) Paid cash to Nelson $4,000 Solution, Capital (100,000) + Liabilities (Nelson = 1,000) = Assets (Cash = 66,000 + Furniture = 25,000 + Goods = 2,000 + William = 8,000) Received cash from William $5,000 Solution Capital (100,000) + Liabilities (Nelson = 1,000) = Assets (Cash = 71,000 + Furniture = 25,000 + Goods = 2,000 + William = 3,000) This is just an example; students are given more challenging problem when it come financial accounting assignment equations.

Some of Other Accounting Problems Include

  • Make an accounting equation for a corporate
  • Accounting equation a sole proprietorship company
  • Calculating the missing amount within equity of owner.
  • Expanded accounting equation for a sole proprietorship firm

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