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okay lets talk a little bit about analyzing transactions using the expanded accounting equation well the first step here is going to figure out what our expanded accounting it okay so heres our expanded accounting equation remember it starts with our ale which is our and Ill write that down for you I like to teach students the basic accounting equation is ale you think about ginger ale or the alcoholic type of ale that is the fundamental foundation for accounting here AR ale and that stands for assets equals liabilities plus ah sorry I shouldnt have a highlight that part the e for equity so assets equal liabilities plus equity and remember assets are things that we own liabilities are things that we owe and then equity is the difference between what we own and what we owe and equity is actually broken into two components you can see here common stock plus retain earnings and then retain earnings gets further broken down into common stock plus revenues so weve got these two compon
