Homework Answers
Solution:
Assets = Liabiliites + Equity
Revenues and expenses will change the equity account
Explanation:
- .Assets and libailities will not be reported on the income statement. It will reported on the balancesheet.
- Assets = liabilities + equity is an accounting equation which it shows on the balancesheet. So it is correct
- Revenues and expenses will change the equity account because The differences between revenues and expenses will be added or decreases to the equity account. If revenues are more than expenses it is added to the equity account and if revenues are less than the expenses it reduces from the equity account.
- Increases and decreases in cash will be reported on the cash flow statement.
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