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ACCOUNTING BASICS: LESSON 2: THE ACCOUNTING FORMULA

Description:

In this video we show you how to use the basic accounting formula  (Assets = Liabilities +  Equity)

 

Video:


 

Table of contents:

 

  • 00:00:13 – Basic accounting formula (Assets= Liabilities + Equity)
  • 00:00:27 – Example
  • 00:01:13 – Asset – Liability = Equity
  • 00:01:47 – Balance sheet
  • 00:02:14 – Trial balance
  • 00:02:44 – Asset – Liability = Equity; Asset = Liability + Equity
  • 00:02:53 – Example in QuickBooks Online
  • 00:05:48 – What exactly is Equity? (Equity = Assets – Liabilities)
  • 00:06:45 – What is exactly net income?
  • 00:07:03 – Assets = Liabilities + Owner’s capital – Owner’s distributions + Sales – Expenses
  • 00:07:34 – Assets + Owner’s distributions + Expenses = Liabilities + Owner’s contributions + Revenues
  • 00:08:35 – Assets – Liabilities = Equity or net assets “net worth”
Hector Garcia

Hector Garcia

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