Question

E2-9 part 22. Using the balances in the t-accounts, fill in the following amounts for the accounting equation:

a) Assets = Liabilities + Equity
b) Revenue - Expenses = Net Income
c) Debits = Credits
d) Cash + Accounts Receivable = Liabilities

Answer 1

The accounting equation is a fundamental concept in business accounting. It relates the assets, liabilities, and equity of a business. It also explains the relationship between revenue, expenses, and net income.

Step-by-step explanation:

The accounting equation is as follows:

a) Assets = Liabilities + Equity

To fill in the amounts for this equation, you will need the balances from the T-accounts.

b) Revenue - Expenses = Net Income

This equation represents the calculation of net income, which is the difference between revenue and expenses.

c) Debits = Credits

In accounting, each transaction must be recorded with equal debits and credits, so the debits will always equal the credits in a T-account.

d) Cash + Accounts Receivable = Liabilities

This equation shows the relationship between cash, accounts receivable, and liabilities.