Accounting Made Simple: Accounting Explained in 100 Pages or Less (Financial Topics in 100 Pages or Less)

In other words, owners’ equity (the part that often confuses people) is just a plug figure. It’s simply the leftover amount after paying off the liabilities/debts.

CHAPTER ONE The Accounting Equation

Assets: All of the property owned by the company.

The accounting equation states that at all times, and without exceptions, the following will be true: Assets = Liabilities + Owners’ Equity

So What Exactly Is Accounting?

CHAPTER TWO The Balance Sheet

Assets = Liabilities + Owners’ Equity, …it might be easier to think of it this way: Assets – Liabilities = Owners’ Equity

Liabilities: All of the debts that the company currently has outstanding to lenders.

Current liabilities are those that will need to be paid off within 12 months or less. The most common example of a current liability is Accounts Payable. Notes Payable that are paid off over a period of time are split up on the balance sheet so that the next 12 months’ payments are shown as a current liability, while the remainder of the note is sh