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    Consumer Math Concepts

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    1. Define the following:
     Asset
     Current asset
     Liability
     Current liability
     Contributed capital
     Retained earnings

    2. Define a business transaction in the broad sense, and give an example of observable external, observable internal, and unobservable events.

    3. For accounting purposes, what is an account? Explain why accounts are used in an accounting system.

    4. What is the basic accounting equation?

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    Solution Preview

    1. Define the following:

    Asset - anything with a value that is owned by a company
    Current asset - an asset that is predicted to be sold or used in the near future like cash or inventory
    Liability - an obligation owed by a company
    Current liability - a liability due within a year
    Contributed ...

    Solution Summary

    This solution provides explanations of general consumer math terms, definition of business transactions, how and why accounts are used and the basic accounting equation.