Basic Accounting Concepts - what am I missing?
jim at jkerr82508.free-online.co.uk
Sun Jan 2 02:44:57 EST 2011
On Sun, 2011-01-02 at 07:01 +0000, James Kerr wrote:
> On Sat, 2011-01-01 at 23:50 -0500, Jim Smith wrote:
> > When one writes the Accounting Equation in the form shown below, it
> > doesn't make any sense to me.
> > (Assets - Liabilities) + (Expenses - Income) = Equity
> You have the equation wrong. The basic accounting equation can be
> written as:
> or in plain language:
> Equity is equal to the sum of net assets and net income.
Apologies, but I had a "brain fart" when I wrote that. (I blame old
age.) The basic Accounting Equation is, of course:
or in plain language:
the total of Equity and net income is equal to net assets.
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