EQl

-
0CtaT04uA9 Ctoumoctb

MEANS WHATS LEFT OVER

RESIDUAL VALUE
AFTER YOU TAKE ALL OF AN ENTITY 'S ASSETS AND

DEDUCT ITS LIABILITIES .

T
-

Tx
-
THERE ARE TWO WAYS THAT FUNDS CAN BE

INVESTED INTO A BUSINESS TO FINANCE its

OPERATIONS . It could CHOOSE TO BORROW

MONEY FROM THIRD PARTY

-

LENDERS

LIKE BANKS WHICH in ESSENCE ARE

,

LIABILITIES ,
OR IT COULD CHOOSE TO USE
THE NET FUNDS INVESTED into THE
BUSINESS BY its OWNERS
,
which
is EQUITY .

OWNERS of A BUSINESS OWN

,
OR NAVE A CLAIM ON ALL OF its NET ASSETS

LEGAL BY
A SEPARATE OWNED
low NER 2 OWNERS Entity that is
SHAREHOLDERS
its

TO THE FUNDS RAISED TO SUPPORT A BUSINESS

CAPITAL RELATES
MEANS THAT it is GIVEN TO THE BUSINESS
CONTRIBUTIONS
.
CAPITAL CONTRIBUTIONS ARE THE ONE OF THE WAYS THAT BUSINESSES

TEND TO FUND THEMSELVES DURING THE EARLY START UP

PHASE ,

BEFORE THEY BECOME PROFITABLE .

e-
-

SAME NAME
FOR ALL
TYPES

WITHDRAWALS IMPACTS THE ACCOUNTING EQUATION BY DECREASING

ASSETS BECAUSE THE BUSINESS 'S CASH HAS GONE DOWN AND

DECREASING EQUITY BECAUSE YOUR CLAIM ON THOSE NET ASSETS has

DECREASED .