The accounting equation

The accounting equation

1. 1-1assets

   • measurable value
     • future benefits
       • possession(own and control)
   • examples
     • equipment
     • land
     • cash
     • debtor
       • owes the business money
   • definition
     • owns and controls

2. 1-2liabilities

   • dept
   • examples
     • loan
     • creditors
       • someone the business owes
         • accounts payable

3. By Bradley Reyes

4. 1-3owners equity

   • owners equity=owners share
     • owners equity=assets-liabilities
       • share holder equity
         • incase of corperations

5. 1-4 expenses

   • cost to make money
     • pay with cash=decrease asset
       • charge=liabilities incerease
         • telephone bill=expense
           • equipment can be liquidated for money
         • company car=owners equity

6. 1-5 revenues

   • income
     • increase owners equity
       • adds value to company
         • increases assets

7. 1-6 net income vs. net loss

   • net income
     • revenues > expenses
   • net los
     • revenues < expensive

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