Accounting- The Basic Accounting Eq

ContentThe Accounting EquationWhat is the purpose of the accounting equation?Assets CalculationDouble Entry & T AccountsAssets = Liabilities + EquityCost of Goods Sold (COGS) Treasury transactions and cancellations are recorded in retained earnings and paid-in-capital. Equity is named Owner’s Equity, Shareholders’ Equity, or Stockholders’ Equity on the balance sheet. Business owners with a sole proprietorship and small businesses that aren’t corporations use Owner’s Equity. Corporations with shareholders may call Equity either Shareholders’ Equity or Stockholders’ Equity. The accounting equation is fundamental to the double-entry accounting system and, put simply, it states that the assets of a business must equal its liabilities & owner’s equity. In order to understand the accounting equation, you have to understand its three parts. Good examples of assets are cash, land, buildings, equipment, and supplies. Money that…