Lesson 1: Accounting Equation

Accounting Equation

• Assets = Liabilities + Owners Equity
• Assets = Tangible and Intangible properties that provide Value
• Liabilities = Debts that you owe that are either monetary or Services
• Owners Equity = The capital that has been put forth by investors/yourself to show the amount of Equity that has been built in the business.

Assets

• Common Types of Assets
• Cash
• Accounts Receivables
• Property
• Uncommon Types
• Intangibles
• Goodwill
• Client Lists
• Data

Liabilities

• Types of Liabilities
• Accounts Payable
• Unearned Revenue
• Notes Payable

Owners Equity

• Types of Owners Equity
• Capital
• Retained Earnings
• Dividends

Financial Statements

• Income Statement
• Shows the Income vs Expenses for the Year
• Balance Sheet
• Shows the Net Worth at a particular moment
• Statement of Cash Flow
• Shows the cash coming in and the cash going out.
• Statement of Owners Equity
• Shows the Change in Equity