1.2 Balance Sheet Equation

Question 0

Resources?

Answer 0

Claims on Resources by Outsiders + Owners

Question 1

Assets =?

Answer 1

Liabilities + Stockholders’ Equity

Question 2

Changes over period b/w 2 balance sheets summarized in (3)

Answer 2

• Income Statement: Retained Earnings b/w 2 balance sheets.
• Statement of Stockholders’ Equity: Contributed Capital b/w 2 balance sheets.
• Statement of Cash Flows: Cash b/w 2 balance sheets.

Question 3

Net Income =?

Answer 3

Revenues- Expenses

Question 4

.•. ENTIRE balance sheet,

Assets=?

Answer 4

Liabilities + Contributed Capital + Prior Retained Earnings + Revenues - Expenses - Dividends!