Discussion Post
In this discussion, we will introduce the basic accounting equation. Understanding the relationship between the equation's key components is essential in learning accounting. Those components are assets, liabilities, and equity. We will also introduce basic transactions within a company that can occur, and how those transactions are recorded. Finally, we look at the 4 basic financial statements and their particular importance.
A. What is the formula for the accounting equation and discuss the components of that equation?
B. You make up a typical business transaction with amounts (maybe your company is buying something for its business) and discuss how this purchase or transaction would impact the accounting equation (Your explanation should describe which accounts(s) are increasing/decreasing and whether those accounts were "debited or credited").
C. Finally, list "IN ORDER of PREPARATION" the 4 basic financial statements and tell us the purpose of each statement.