BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Income statement
|
|
|
Balance sheet
|
|
|
Cash flow statement
|
|
|
Statement of owner’s equity
|
Detailed explanation-1: -The expanded accounting equation goes hand in hand with the balance sheet; hence, it is why the fundamental accounting equation is also called the balance sheet equation.
Detailed explanation-2: -The balance sheet is based on the fundamental equation: Assets = Liabilities + Equity. As such, the balance sheet is divided into two sides (or sections). The left side of the balance sheet outlines all of a company’s assets.
Detailed explanation-3: -Overview: The balance sheet-also called the Statement of Financial Position-serves as a snapshot, providing the most comprehensive picture of an organization’s financial situation. It reports on an organization’s assets (what is owned) and liabilities (what is owed).
Detailed explanation-4: -The financial statement which uses the expanded accounting equation is the balance sheet.
Detailed explanation-5: -These financial statements give a quick overview of the company’s financial position. The accounting equation makes sure the balance sheet is balanced, showing that transactions are recorded accurately.