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Adjusting entries are made at the end of a period to update accounts. An adjusting entry affects an income statement and balance sheet account. This is lesson 3 in our financial accounting...
Financial Reporting The goal of financial accounting is to issue financial statements. The first step of financial reporting is recording business transactions. This is lesson 2 in our...
What is Revenue? Revenue is income from selling a product or service. A company earns revenue when it receives an asset for selling to a customer. The asset could be cash, accounts receivable,...
Equity is owners' investment in a company. Stockholders' equity equals assets minus liabilities and it appears on the balance sheet. What is Equity? Equity appears on a company's balance...
What is a Liability? In accounting, a liability is debt owed to company or individual. Liabilities are a claim on a company's assets by the creditors. Liabilities require a payment of assets, such...
In accounting, an asset is a resource owned by a company or entity. Assets provide probable future economic benefits. These benefits include increasing sales or cash flow or reducing expenses....