🎥+✏️Analyzing Business Transactions🟢

Responses

1. 

   Tenma Spencer 15 June 2024

   I’m trying to understand the accounting equation from a theoretical perspective. Why is it what it is and why does it always hold?

   1. 

      Maroun, CPA 17 June 2024

      Hello Tenma,

      The accounting equation (Assets = Liabilities + Equity) is fundamental to understanding financial accounting. This equation always holds true due to its basis in the principles of double-entry bookkeeping and its reflection of the relationship between a company’s resources (assets) and the claims on those resources (Liabilities and equity).

      The equation illustrates that the resources of the company (assets) are financed by borrowing money (liabilities) or through the owner’s own funds (equity).

      Every transaction impacts the equation in such a way that it remains balanced.
      For instance, if a company takes out a loan of $10,000, both its liabilities and assets (cash) increase by $10,000.
      If the company earns revenue, assets (cash or receivables) increase, and equity increases (retained earnings).

      This system ensures that the total amount of debits equals the total amount of credits, keeping the accounting equation in balance.

      I hope this helps!

      1. 

         Tenma Spencer 17 June 2024

         Thank you 🙂

         1. 

            Maroun, CPA 18 June 2024

            You’re welcome! 😊
            If you have any more questions or need further assistance, feel free to ask.
            Happy studying!

2. 

   Josiah Scandle 3 September 2026

   The page is saying I scored 37/37 but have only completed 74% of total… there are no other questions I am seeing!

   1. 

      Maroun, CPA 5 September 2026

      Hello Josiah,

      Thank you for letting me know. You are not necessarily missing anything from the accounting content. The full exercise should show 50 total points, and when completed it should show 50/50 and allow you to mark the topic complete.

      If your screen shows 37/37 but only 74% complete, that likely means the page did not load all required items correctly or some items are not displaying on your end. Please try a hard refresh using Ctrl + Shift + R, then reopen the exercise and check again.

      Please let us know if the issue persists.