Borrowing Money (no interest)

[Buddha Buck]

Yes, and yes.

Basically, the 3 main categories of "balance sheet" accounts are arranged
such that the following equation is always true:

Assets = Liabilities + Equity

Liabilities are things you borrowed from others, Equity is what is yours
outright (your net worth). The accounts are set up so that when you owe
someone something, the liability account has a positive balance, when you
have a positive net worth, the equity accounts have a positive balance, etc.



On Tue, Jan 14, 2014 at 9:45 AM, picosam <picosam at gmail.com> wrote:

> Thank you! And so it's normal that the account labelled Personal Loans then
> has a positive balance of 500$?
> Also, let's say that I opened my Personal Loans liability account with an
> existing outstanding balance of 3000$ (like a previous loan from a friend
> that has already been spent) - would that also come from Equity?
>
>
>
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