BA110 Accounting Principles Week 2 Chapter 2 - Discussion Questions 1. What is revenue? 2. What are expenses? 3. How is net income determined? 4. How does net income affect owner's cquity? 5. Describe the effects of each of the following business transactions on assets, liabilities, and owner's cquity. a. Bought equipment on credit. b. Paid salaries to employees c. Sold Services for cash. d. Paid cash to a creditor. e. Bought furniture for cash. f. Sold services on credit. 6. What is the fundamental accounting equation? 7. What are assets, liabilities, and owner's equity? 8. What information does the balance sheet contain? 9. What information does the income statement contain? 10. What information does the statement of owner's equity contain? 11. What information is shown in the heading of a financial statement? 12. Why does the third line of the headings differ on the balance sheet and the income statement