Learning Objectives
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Exercises
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Key terms:
Balance-sheet-equation model- Record-keeping approach using a matrix to aggregate the effects of accounting entries where columns are accounts organized by the balance sheet equation (A=L+OE) and rows are entries or balances. Also referred to as BSE model.
Account sign- Represents the account’s impact on its primary balance-sheet class (+/-).
Entry sign- Represents the entry’s affect on the account, either increase or decrease (+/-).
Mini-BSE matrix- Derived from the full balance-sheet-equation matrix by eliminating rows and columns that do not pertain to a specific entry.