Business transactions Analyze business transactions using the accounting equation. Identify and prepare basic financial statements and explain how they interrelate. Explain the steps in processing transactions. Describe an account and its use in recording transactions. Describe a ledger and a chart of accounts. Define debits and credits and explain double-entry accounting.
Explain the relationship between economic resources and claims to economic resources. Provide an example of a transaction, applied to the accounting equation.
Economic Resources Explain the relationship between economic resources and claims to economic resources. Why must this equation always balance? What transactions increase or decrease owner’s equity? How does net income or loss affect owner’s equity? Provide an example of a transaction, applied to the accounting equation.