Assets, Liabilities & Equity: Made Easy!

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In this video, you'll discover everything you need to know about Assets, Liabilities and Equity in Accounting.

Assets, Liabilities & Equity are the three main components of the Accounting Equation. The Accounting Equation says that a business's Assets must always be equal to its Liabilities plus Equity.

Essentially, Assets represent the stuff that a business owns, and Liabilities & Equity represent the stuff that a business owes. Liabilities are owed to third party creditors, whereas Equity is owed to the owners of the business.

Well, that's the gist of it...

Now let's take a closer look at each of these terms to see what we can learn about them.

Assets are probable future economic benefits obtained or controlled by a particular entity as the result of past transactions or events. They're divided into two main groups: Current Assets and Non-Current Assets.

Liabilities are probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future, as a result of past transactions or events. There are three main types of Liability: Current Liabilities, Non-Current Liabilities & Contingent Liabilities.

Equity is the residual value of an entity's Assets after deducting all its Liabilities. It represents the Net Funds invested into a business by its owners. Equity is made up of a few different components: Capital Contributions, Retained Earnings & Withdrawals.

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⏱️TIMESTAMPS
00:00 - Intro
00:14 - What are Assets, Liabilities & Equity?
01:00 - What are Assets? (Definition)
05:27 - Current Assets
06:46 - Non-Current Assets
09:08 - What are Liabilities? (Definition)
11:34 - Current Liabilities
16:11 - Non-Current Liabilities
17:12 - Contingent Liabilities
18:15 - What is Equity? (First Definition)
19:31 - What is Equity? (Second Definition)
20:53 - Equity Example
21:28 - Business Structures
22:22 - Capital Contributions
23:56 - Retained Earnings
25:41 - Withdrawals
26:34 - Expanded Accounting Equation

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