Difference between Assets and Expenses
When you’re just starting to learn accountancy, it can be easy to confuse the expenses of a business with its …
Financial Accounting
10 Elements of Financial Statements
The accounting information of a business can be organized into ten elements of the financial statements. In this lesson, I …
Why Does Every Accounting Transaction Have 2 Effects?
One question that confuses many beginners is why every accounting transaction has two effects. To answer this question, we need …
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Why must Accounting Equation always Balance?
Assets = Liabilities + Equity Accounting Equation is the key to understanding the double-entry system of accounting. One thing …
Why do Managers & Employees Need accounting information?
Managers and employees require accounting information of their work organization for personal and professional reasons that are summarized in the …
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Why do creditors need accounting information?
Accounting information about a business is not just relevant to its owners and managers. Other users of accounting such as …
Why Should A Balance Sheet Always Balance?
Understanding why a balance sheet is always expected to balance can be hard to grasp especially for beginners. In this …
Is Income a debit or credit?
Do we debit or credit income? Why do we account for income that way, and do the rules change if …
Business Entity Principle
In accounting, it is important to differentiate between business and personal transactions because you only want to record those transactions …
Capital and Revenue Expenditures
Business expenditures are accounted for in either one of the two ways. They are either expensed in the income statement …
