Accounting Basics
The accounting equation is a fundamental balance sheet equation, such as liabilities + net worth = assets. The accounting equation holds at all times over the life of the business. When a transaction occurs, the total assets of the business may change. It also serves as the basis for the balance sheet.
An asset is anything valued or owed like cash. A
liability is an amount owed such as if you would pay on account for something.
Stockholders are owners of one or more shares of stock. Revenue is an increase
in equity resulting from the sale of goods or services. Expenses are the cost of
goods or services used to operate a business. And lastly cost of merchandise is
the amount a business pays for goods it purchases to sell.
liability is an amount owed such as if you would pay on account for something.
Stockholders are owners of one or more shares of stock. Revenue is an increase
in equity resulting from the sale of goods or services. Expenses are the cost of
goods or services used to operate a business. And lastly cost of merchandise is
the amount a business pays for goods it purchases to sell.