Posts Tagged ‘Accounting Formula’
Normal Balance: Expense
The normal balance of an Expense Account is a Debit. So, if you purchased $450 worth of office supplies, it means you have a $450 Debit in the Office Supplies account.
Read More
Normal Balance: Revenue
The normal balance of a Revenue Account is a Credit. So, if you earned $750 from selling widgets (Sales), it means you have a $750 Credit in the Sales account.
Read More
Normal Balance: Owners’ Equity
Like Liability Accounts, the normal balance of an Owners’ Equity Account is a Credit. So, if you have $250 in Retained Earnings, it means you have a $250 Credit in the Retained Earnings account.
Read More
Normal Balance: Liabilities
The normal balance of a Liability Account is a Credit. So, if you owed $750 to someone in the form of a Notes Payable, it means you have a $750 Credit in the Notes Payable account.
Read More
Normal Balance: Asset
The normal balance of an Asset Account is a Debit. So, if you had $1,000 in a bank account, it means you have a $1,000 Debit in the bank account.
Read More
Examples of Liabilities
Liabilities appear on a company’s Balance Sheet and are what the company owes. Liabilities can be Accounts Payable, Notes Payable, Payroll Payable, Rent Payable, Taxes Payable or any other payable.
Read More
Basic Accounting Formula collaborative post
A couple of weeks ago I posted about the Basic Accounting Formula here and James Ong, Host from the QB Community, contacted me about collaborating on a post for the QB Community. In case you didn’t know, the QB (QuickBooks) Community is a great online resource where you can learn about QuickBooks, Accounting, and Small Business. The…
Read More
Examples of Assets
Assets appear on a company’s Balance Sheet and are what the company owns. Assets can be Cash, Accounts Receivable, Equipment, Inventory, Land, Buildings, or even Intangible items.
Read More
What is Owners’ Equity?
Owners’ Equity appears on a company’s Balance Sheet and is the amount owners have put into the company less what they’ve taken out, plus net income for the life of the company. Per the basic accounting formula, Owners’ Equity must equal Assets minus Liabilities.
Read More
What are Liabilities?
Liabilities appear on a company’s Balance Sheet and are what the company owes. Per the basic accounting formula, Liabilities have to equal Assets minus Owners’ Equity. The company is obligated to pay their liabilities.
Read More