객관식
Which of the following best defines an asset in the context of the fundamental accounting equation?
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1. Introduction to Accounting
Fundamental Accounting Equation
객관식
Which of the following statements best describes the effect of expenses on equity according to the fundamental accounting equation?
A
Expenses decrease equity because they reduce net income.
B
Expenses have no effect on equity.
C
Expenses increase both assets and equity.
D
Expenses increase equity because they are investments in the business.
검증된 단계별 안내1
Understand the fundamental accounting equation: Assets = Liabilities + Equity. Equity represents the owner's residual interest in the business after liabilities are subtracted from assets.
Recognize that net income is a component of equity. Net income is calculated as Revenues - Expenses. Therefore, expenses directly impact net income, which in turn affects equity.
Analyze the relationship between expenses and equity: When expenses increase, they reduce net income. A reduction in net income leads to a decrease in equity.
Evaluate the incorrect options: Expenses do not increase equity because they are not investments; they represent costs incurred to generate revenue. Expenses also do not increase both assets and equity, nor do they have no effect on equity.
Conclude that the correct statement is: 'Expenses decrease equity because they reduce net income.' This aligns with the fundamental accounting equation and the relationship between expenses, net income, and equity.
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