1. Question : (TCO 1) The Accounting Equation is used to develop the organizations financial reports. (1) Describe what owners' equity is (10 points) and (2) provide an example of an owners' equity account. (10 points)
Owner's equity or stockholders' equity is the amount left over after liabilities are deducted from assets. Using the accounting equation AssetsLiabilities Owners equity, we can easily subtract liabilities from each side to isolate owner equity. A balance sheet would provide owner equity account information, specifically a corporation would use Common Stock, Retained Earnings, and Dividends accounts to record in the company's stockholders' equity.
Instructor Explanation: Textbook page 13. Owners' Equity represents insider claims of a business....
Excerpt from file: 1. Question: (TCO1)TheAccountingEquationisusedtodeveloptheorganizations financialreports.(1)Describewhatowners'equityis(10points)and(2) provideanexampleofanowners'equityaccount.(10points) StudentAnswer: InstructorExplanation:
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