XACC 280 Week 1 CheckPoint 2 - The Accounting Equation

Checkpoint: The Accounting Equation
• View Phxklips The Accounting Equation on your student Web site
• Write an explanation of the function of each element in the accounting equation, using 100 to 150 words
Complete E1-5 on p. 34 of Financial Accounting

All of accounting is based upon one fundamental equation. A company’s assets are equal to that of their liabilities and their owners slash shareholders equity. This is known as ALOE. Assets in this equation are the properties and resources owned by a company. Property and resources can be anything from cash to equipment including the property itself and the factory located on the property.
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