Professional Documents
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Equation
Objective 1 - State the accounting equation and define each
element of the equation.
Note: Expenses that have paid for (or incurred) but not yet been used up are referred to as prepaid
expenses e.g. supplies.
When these prepaid expenses have been used up, they will then become regular
expenses e.g. supplies expenses
Assets Liabilities + Owners Equity
2. Beginning with entry (e) the asset section will be shown first, then the
liabilities and owners equity will be shown in the following slide.
Assets
Cash + Supplies + Land
Bal. 12,500 1,350 20,000
e. 3,650
Bal. 8,850 1,350 20,000
Increased by Decreased by
Owners Owners
investments withdrawals
Revenues Expenses