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At the time the employee is hired there is no immediate financial effect on the assets, liabilities or stockholders equity Accounting Equation Expanded

/in /by

balance sheet

reports financial position (types of amounts of assets, liabilities, & equity) at point in time

assets, expenses, withdrawals

DEBIT

liabilities, revenues, capital

CREDIT

Assets

What we own (economic resources that can be expressed in monetary terms)

ex: Investments, Accounts Receivable, Inventories, Prepaid Expenses (and other current), Property, Plant and Equipment , Net

Liabilities

-who we owe (how quickly we owe it)
-obligations or debts that a business must pay

ex: Accounts payable, Income taxes payable

Stockholders Equity

stockholders claim on the assets of the firm

ex: Common Stock and Retained Earnings

Accounting Equation

Assets = Liabilities + Owner’s Equity

Assets, Liabilities and Stockholders Equity Graphs

Systems of Debits and Credits

Left side is always Debit

Right side is always Credit

Hired an Employee

-non accounting transaction
-At the time the employee is hired there is no immediate financial effect on the assets, liabilities or stockholders equity

Accounting Equation Expanded

 
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