Assets

Assets refer to resources owned and controlled by the entity as a result of past transactions and
events, from which future economic benefits are expected to flow to the entity. In simple
terms, assets are properties or rights owned by the business.
Liabilities
Liabilities are economic obligations or payables of the business. They arise from past events
such as obtaining a loan to buy equipment for your business. Liabilities represent claims by
other parties aside from the owners against the assets of a company.
Equity
Equity is the money or capital that you put into your business, hence the phrase "owner’s
equity." Also known as net assets or equity, capital refers to what is left to the owners after all
liabilities are settled. Technically, equity represents all the ways in which your business draws
its resources so that it functions or operates properly.
Revenue/ Income
Income refers to an increase in economic benefit during the accounting period in the form of an
increase in asset or a decrease in liability that results in increase in equity, other than
contribution from owners.
Expenses
Expenses are decreases in economic benefit during the accounting period in the form of a
decrease in asset or an increase in liability that result in decrease in equity, other than
distribution to owners.
Like income, expenses are also measured every period and then closed as part of capital.