Assignment: Discussion-The Accounting Equation
By the due date assigned, respond to the following in the Discussion Area below:
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.