Accounting equation

Accounting Equation

Asset = Capital + Liability

Asset : Economic entities that give future economic benefit, controlled by entity from past transaction
Asset divided by 2 :
* Fix Asset :Asset that used in accountancy that cannot easily converted into cash, and have a depreciation allowance, because it depreciate over time
* Land
* Building
* Vehicles
* Furniture* Office equipment
* Machine and Computer
* Fixtures
* Current Asset : An asset that expected to be sold or used up in the near future, usually within 1 year.
* Cash (hand-cash andbank-cash)
* Debs
* Inventory
* Accounts receivable
* Other short-term investment

Capital : Some funding that the owners put to start a business it can be a cash or property
*Authorized Capital : The total amount of share capital that can be arise as it stated in the agreement
* Paid-Up Capital : The total amount of shareholder capital that has been paid in full byshareholders

Liability : An obligation of an entity from past transactions
* Current Liabilities : these liabilities are reasonably expected to be liquidated within a year.
* Wages
*Accounts
* Taxes
* Unearned revenue when adjusting entries
* Portions of long-term bonds to be paid this year
* Short-term obligations
* Long-Term Liabilities : theseliabilities are reasonably expected not to be liquidated within a year
* Issued long-term bonds
* Notes payables
* Long-term leases
* Pension obligations
* Long-term product warrantiesType Of Company |
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Criteria | Sole Proprietorship | Partnership | Corporation |
Ownership | 1 people | Minimal 2, maximum 20 | Minimum 2, maximum 50 |
Registration |   |   |   |Capital | Invested by sole proprietor and contribute by the owner | Fund by contribution based on business sharing margins and contribution by the partner according to the partnership agreement | Fund by...