What is Accounting? The Basic Accounting Equation
This short video defines the Accounting steps and explain the basic accounting equation
Assets = Liabilities + Owners' Equity
An asset is a resource that has some economic value to a company and can be used in a current or future period to generate revenues. These resources take many forms from cash to buildings and are recorded on the balance sheet until they are used
Liabilities are defined as debts owed to other companies. In a sense, a liability is a creditor’s claim on a company’ assets. In other words, the creditor has the right to confiscate assets from a company if the company doesn’t pay it debts.
Owner’s equity, often called net assets, is the owners’ claim to company assets after all of the liabilities have been paid off. In other words, if the business assets were liquidated to pay off creditors, the excess money left over would be considered owner’s equity.
Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities
Thank you for watching, if you liked the video give it thumbs up and subscribe to my channel.
Socrat Ghadban
• What is Accounting? The Basic Accounting E...
#accounting #accountingforbeginners #basicaccounting