wk4 db1 michael smith

The accounting equation is assets = liabilities + owner’s equity.

Please 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.

Be sure to cite any sources using APA style. You may use this APA Citation Helper as a guide.