Assets ● Cash. Anything the company owns ● Stock. Debit ● Building. that has monetary value. These ● Machinery. are listed in order of liquidity, ● Equipment from cash (the most liquid) to land (least liquid)
Liabilities ● Bank debt. All debts that a company has
● Mortgage debt. ● Money owed to suppliers yet to pay are referred to as (accounts payable) Liabilities. Common liabilities Credit ● Wages owed. include Accounts Payable, ● Taxes owed Payroll, and Loans
Owners’ ● Common Stock. Equity denotes the value left
Equity ● Preferred Stock. ● Retained Earnings. over after liabilities have been removed. Recall the equation Credit Assets = Liabilities + Equity. If you take your Assets and subtract your Liabilities, you are left with Equity, which is the portion of the company that is owned by the investors and owners
Owners’ Owner withdrawals are the distributions
Withdrawal that you as a business owner -- sole proprietor, member, partner or shareholder -- take from your business's retained earnings for personal use. The Debit actual payment is made from your company's cash flow or cash account
Revenue ● Sales. Revenue is any money earned
● Rent revenue. Credit ● Dividend revenue. by the business ● Interest revenue.
Expenses ● Cost of goods sold. An Expense is any cost
● Sales commissions expense. ● Delivery expense. incurred by the business ● Rent expense. Debit ● Salaries expense. ● Advertising expense.