In the following lessons you will learn about the accounting equation.
In the following lessons you will learn about the accounting equation. You will also gain a better understanding of double-entry bookkeeping and how it relates to the accounting equation. This module will also cover the various kinds of assets an organization can have. You will learn about the possible liabilities a business can have and the basic equity accounts used in accounting.
Learning Objectives
- Learn the different types of assets
- Learn how to utilize certain financial statements
What You'll Learn
- Explain the accounting equation and how it underpins bookkeeping
- Apply double-entry bookkeeping and relate it to the accounting equation
- Identify the different types of assets an organization can have
- Recognize the possible liabilities a business can have
- Describe the basic equity accounts used in accounting
- Utilize certain financial statements such as the balance sheet
Key Takeaways
- The accounting equation is the foundation that connects assets, liabilities, and equity in bookkeeping.
- Double-entry bookkeeping is directly related to the accounting equation.
- Organizations can hold various kinds of assets, and the course covers these types.
- Businesses can carry different possible liabilities, which the course examines.
- Accounting uses a set of basic equity accounts that the course introduces.
Frequently Asked Questions
What topics does this course cover?
This module covers the accounting equation, double-entry bookkeeping and how it relates to the accounting equation, the various kinds of assets an organization can have, the possible liabilities a business can have, and the basic equity accounts used in accounting.
What will I learn by the end of this course?
Per the learning objectives, you will learn the different types of assets and learn how to utilize certain financial statements.
What lessons are included?
The course includes five lessons: The Accounting Equation, Double-entry Bookkeeping, Types of Assets, Types of Liabilities, and Equity.
Does this course explain double-entry bookkeeping?
Yes. The course helps you gain a better understanding of double-entry bookkeeping and how it relates to the accounting equation.
Transcript
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(upbeat music) Balance sheets help your business remain financially stable. You'll learn how to use the accounting equation and double entry bookkeeping to your advantage. In the following lessons, you'll be introduced to the types of assets and liabilities you may encounter, as well as gain a better understanding of equity. The accounting equation is a pillar of bookkeeping. The equation is as follows, assets equal liabilities plus the owner's equity. Each element of the accounting equation has its own account in an accounting system. Any changes that occur in these elements are tracked within its separate account. The accounting equation must always stay in balance. After every business transaction, the assets need to equal the liabilities. Imagine that you opened a small cafe and you invest $20,000 in cash into the business. At the start of the business, your assets are worth $20,000 and you currently have no liabilities. The accounting equation may seem easy to understand in scenarios like this. However, in order to keep the equation in balance every transaction has to be recorded as two separate entries. As each transaction is recorded there must be an equal and opposite transaction so that the two accounts balance.
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