Subject EconomicsElements of Accounting Equation
There are three elements of accounting equation namely,AssetsLiabilitiesEquity
In accounting equation,Assets = Liabilities + Equity1. ASSETS
In accounting, assets are any resources with value owned by the business, company, entity or person. Assets have two categories, these are:Current AssetsNon-current Assets
-these are assets that can be readily convertible to cash in a normal operating cycle of a business.
Some Examples of Current AssetsCash and cash equivalentsAccounts ExpensesMarketable Securities
-these are long-term assets or long-term investments that have a longer useful life that is usually more than 1 year. Not easily convertible to cash.
Some Examples of Non-Current AssetsLandProperty, Plant and EquipmentTrademarksLong-term InvestmentsGoodwill
All fixed assets and intangible assets fall under the category of non-current assets.2. LIABILITIES
In accounting, liabilities are the payables or debts of a business to settle. Liabilities have two main categories:
-these are payables or debts which are short-term payables that needs to be paid or settled by the business within a year.
Some Examples of Current LiabilitiesAccounts PayableInterest PayableIncome Tax PayableAccrued ExpensesShort-term loans
-these are payables or obligations that are long-term liabilities that can be settle after a year or more than a year.
Some Examples of Non-Current LiabilitiesBonds PayableLong-term Notes PayableDeferred Tax LiabilitiesMortgage Payable3. EQUITY
In accounting and finance, equity refers to shareholders/ owners' equity. This is the net worth value attributable to the owners of a business. This is the difference between the value of the assets of the business and the value of the liabilities.
Shareholders Equity Components
On the balance sheet, under equity components are:Common StockPreferred StockRetained EarningsAdditional paid-up capital-common stockAdditional paid-up capital- preferred stockTreasury sharesNon-controlling interest (also called minority interest)Foreign currency translation reserve
For further details about equity
Further topics about assets and liabilities
What is the opposite of assets
Elements of the accounting equation:Assets - resources owned by a company.Liabilities - resources owed by a company.Equity - net worth value of the company.
The accounting equation:Assets = Liabilities + Equity
Assets are what the company owns such as building, cash, land and etc.
Liabilities are what the company owes and the company is responsible to pay.
Equity is the net worth of the company
ngunit ano nga ba ang epekto ng patakarang piskal sa ating pambansang ekonomiya?