accounting: financial statements 2a

Assets

Something that is owned by a Buisness

Ie. Motor vehicles, bank accounts buildings, stock, debtors/accounts (someone that owes the business money)

Liabilities

debt that the business owes to external parties

ie. loans, mortgage & creditors

mortgage

When the bank lends money to a business

Creditors / accounts payable

Individuals or businesses that the buisness owes money to

Capital l equity

Financial resources the briskness uses to generate profit

Drawings

Take money/ stocks out of the business

Additional capital

Money/ stock injected into the business

Duality

Every transaction has a two sided effect on the accounting equation so it remains balanced.