Imagine you are a recent graduate with a Bachelor of Science degree in Accounting and you are on your first big interview. The interviewer will ask you one question to test your knowledge of an accounting concept. Why the Numbers Must Balance - Seems like a very simple concept, and it is. In Physics we learned Newton's third law: For every action, there is an equal and opposite reaction. In Economics, we learned about tradeoffs: the cost of something is what you give up to get it. Similarly in Accounting, one of the most useful concepts and tools is the Balance Sheet with its interdependent sections.

The primary concept is the Accounting Equation: Assets = Liabilities + Equity. These sections must always be in balance. If Assets increase, then either Liabilities or Equity must also increase. If, as a result of our transactions, adjustments and reporting, this balance is being violated, then that is a problem that must be resolved.

Write a response to the question.

1. Research the concept to obtain additional information

2. Answer the question based on your understanding of the concept

3. In writing the paper, begin with a description of the conceptual issue

4. Next summarize the issue, so you demonstrate to the interviewer, your understanding of the concept

5. Finally, provide a concrete example to demonstrate how you would apply the concept in an accounting setting