Assets & Liabilities
Posted by Steven in Assets, expense, income, Liabilities, Statement of Owner’s Equity
The assets are the goods owned by the company such as real estates, inventory, and other items of value. Liabilities are the obligations, generally owed to suppliers. Owners’ Equity is what belongs to the owners. The equation falls as follows
Assets = Liabilities + Owner’s equity
As we all know , assets and liabilities accounts together, as a opposite sides of a balanced equation, with owner’s equity , of course.That’s
why they make up the balance sheet, which shoes the financial position of the company. In similar way , income and the expense accounts go together and make up the income statement, which shows what’s coming in and going out. It’s really two simple systems that become a little complicated when they re put together, because the double entry systems sometimes requires entries that may at first seem strange, because of the need to balance. Its usually easy enough to understand how assets and liabilities are affected by a transaction, but it may be harder with the effect of a transaction on income and expense accounts.
Assets = Liabilities + Owner’s equity
As we all know , assets and liabilities accounts together, as a opposite sides of a balanced equation, with owner’s equity , of course.That’s
why they make up the balance sheet, which shoes the financial position of the company. In similar way , income and the expense accounts go together and make up the income statement, which shows what’s coming in and going out. It’s really two simple systems that become a little complicated when they re put together, because the double entry systems sometimes requires entries that may at first seem strange, because of the need to balance. Its usually easy enough to understand how assets and liabilities are affected by a transaction, but it may be harder with the effect of a transaction on income and expense accounts.
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