The Accounting Equation

The Accounting Equation - marked as assets because these...

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The Accounting Equation Jennifer O’Neal XACC 280 Angelia Hunter Axia College of University of Phoenix October 23, 2011
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Instructions - Classify each item as an asset, liability, or stockholders’ equity. E1-5 Meredith Cleaners has the following balance sheet items. Accounts payable – asset Accounts receivable - a liability Cash – an asset Notes payable - Liability Cleaning equipment -Asset Salaries payable -Liability Cleaning supplies –Stock holders equity Common stock – Stock holders equity I have listed each of these into the category based on the resources that are owned by a business (assets), existing debts and obligations against assets (liabilities), and the ownership claim on total assets (stock-holders equity). Accounts payable, cash, and cleaning equipment I have
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Unformatted text preview: marked as assets because these are all resources the business would own. Accounts receivable, notes payable, and salaries payable are all liabilities because they are all moneys that are owed to either employees, banks for barrowed monies, or creditors in general. These are also called obligations which creditors can legally force liquidation in order to retain the business debts. Cleaning supplies and common stock I have listed as stock holders equity because it is neither assets nor liabilities therefore it would be considered stock holders equity. This is because Assets Liabilities = Stock Holders Equity....
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This note was uploaded on 10/28/2011 for the course BEH 225 taught by Professor Mrking during the Spring '09 term at University of Phoenix.

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The Accounting Equation - marked as assets because these...

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