The preceding balance sheet for Edelweiss was static. This means that it represented the financial
condition at the noted date. But, each passing transaction or event brings about a change in the overall
financial condition. Business activity will impact various asset, liability, and/or
equity accounts; but, they will not disturb the equality of the accounting equation. So, how does this happen? To reveal the answer to this question, let’s look at four specific transactions for Edelweiss Corporation. You will see
how each transaction impacts the individual asset, liability, and equity accounts, without upsetting the basic equality of the overall balance sheet.
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