The Accounting Equation

The Accounting Equation - The Accounting Equation

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The Accounting Equation The ability to read financial statements requires an understanding of the items they include and the  standard categories used to classify these items. The accounting equation identifies the relationship  between the elements of accounting. Assets . An  asset  is something of value the company owns. Assets can be tangible or intangible.  Tangible assets  are generally divided into three major categories: current assets (including cash,  marketable securities, accounts receivable, inventory, and prepaid expenses); property, plant, and  equipment; and long-term investments.  Intangible assets  lack physical substance, but they may,  nevertheless, provide substantial value to the company that owns them. Examples of intangible  assets include patents, copyrights, trademarks, and franchise licenses. A brief description of some  tangible assets follows.  Current assets
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This note was uploaded on 11/14/2011 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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The Accounting Equation - The Accounting Equation

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