Requirement 1. Determine the company's accounting equation, and label each element as a debit amount or a credit amount. If you use

$28,000

for the owner's equity, why is the accounting equation out of balance?

Complete the accounting equation below, and then below each element, select whether it is a debit or credit account. Finally, enter the amount for each element into the accounting equation, using

$28,000

for owner's equity. Note that the equation will not balance.

	Assets	=	Liabilities	+	Owner's equity
	Debit	=	Credit	+	Credit
	$75,325	=	$46,300	+	$28,000

Why is the equation out of balance?

A.

The Unadjusted Trial Balance does not balance because the expense accounts are included and they should not be.

B.Not all of the elements of owner's equity were included in the

$28,000.

The Net Income or Net Loss amounts and

Lionel

Callahan,

Withdrawals were not included.

C.Not all of the elements of owner's equity were included in the

$28,000.

The revenue and expense accounts were not included.

D.

The Unadjusted Trial Balance does not balance because there are errors with the amounts of several accounts.