Hi guys can you help?
I'm trying to understand the accounting equation which can be used in many ways below is a simple example. I don't know how it works but I came out with the answer of £128.00. Do you know how it works?
Cheers
John
Using the accounting equation fill in the gaps in the following table
Capital Current Liabilities Fixed Assets Current Assets
£66 £12 £74 ?
One of these answers is correct:-
£128
£20
- £4
- £128
£4
Does anyone know how the accountancy equation works?
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- John Wallis
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Think it goes something like this
Capital (Value) = Assets (Things we have or are owed) - Liabilities (Things we owe)
Capital = (Fixed Assets + Current Assets) - (Current Liabilities)
£66 = (£74 + ?) - £12
Now Transpose (shift about) the formula
£66 + £12 = £74 + ?
£66 + £12 - £74 = ?
? = £66 + £12 -£74
Current Assets = Capital + Current Liabilities - Fixed Assets
Current Assets = £66 + £12 - £74 = £4 !!!!
Been a long time but I think that's about it.....
Capital (Value) = Assets (Things we have or are owed) - Liabilities (Things we owe)
Capital = (Fixed Assets + Current Assets) - (Current Liabilities)
£66 = (£74 + ?) - £12
Now Transpose (shift about) the formula
£66 + £12 = £74 + ?
£66 + £12 - £74 = ?
? = £66 + £12 -£74
Current Assets = Capital + Current Liabilities - Fixed Assets
Current Assets = £66 + £12 - £74 = £4 !!!!
Been a long time but I think that's about it.....
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- Bradleisure
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- Bradleisure
- Chatty
- Posts: 423
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- John Wallis
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- Posts: 4072
- Joined: Tue Dec 20, 2005 7:17 pm
- Location: Northumberland