Thursday, May 6, 2010

Understanding the Basics

Accounting causes a great deal of confusion to many a beginner. But this need not be so. Accounting is not so complicated as to be feared. Accounting is not rocket science. It's based on a simple concept called double-entry bookkeeping. Accounting is believed to have its origins in the Middle ages! Sounds incredible, doesn’t it?
There are five basis terms that cover the entire arena of accounts:
Assets, Liabilities, Equity, Revenue and Expense.
Assets are what you own, e.g., cash, building, equipment, computers, car..
Liabilities are what you owe – a loan from a bank, an amount due to the person who supplied you some goods on credit..
Equity is your net worth – what belongs to you. The capital you invested, the profit that you earned but that is still kept in the business..
Revenue is what you earn – Sales, Service Revenue, Fee earned.
Accounting Homework help is always at hand.

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