Even though Accounting isn't for just anybody
There are basic concepts that absolutely everyone should know
Whether we are entrepreneurs, employees
Or we simply want to keep better control of our finances
This is the case of the concepts of asset, liability and capital
Stay to watch the video to easily understand these concepts
The asset, liability and capital are the main elements
That make up the balance sheet
That is one of the most important financial statements of companies
Let's start with the concept of assets
Assets are the total resources that a company has
To carry out its operations
That is, all the goods, investments and rights that are owned by the company
Assets, in turn, are mainly divided into current assets
Fixed assets and deferred assets
Current assets are all temporary goods and rights
Or convertible into cash within twelve months
That is, current assets are the ones that have the highest liquidity
Some examples of current assets are
Cash, that is, cash on hand
Banks, that is, the money that's held in bank accounts
Merchandise, among others
Now let's move on to fixed assets
Fixed assets or non-current assets
Are the goods that the company usually keeps for more than one year
These assets are harder to turn into cash
That is, they have little liquidity
Examples of fixed assets would be
Land, buildings, machinery, furniture, equipment
And any other asset that the company keeps long term
For its part, deferred assets are made up of expenses
That have been paid in advance
That is, some good or service has already been paid for
But it still hasn't been used
Having finished with assets, let's move on to liabilities
Liabilities represent the sum of the debts and obligations
That a company has taken on
These are mainly divided into current liabilities
Fixed liabilities and deferred liabilities
Current liabilities represent all the debts and obligations
That is, obligations that must be paid in less than one year
For example: suppliers, creditors and notes payable
Fixed liabilities, on the other hand, include all long-term debts
That is, over more than one year
Such as mortgage creditors and long-term loans
Deferred liabilities, for their part, are all those collections
That have been made in advance
For goods or services that we still haven't provided
That is, we owe the good or service
Once the concepts of asset and liability are understood
We can move on to capital, also known as equity
Capital is the equity of a company's shareholders
That is, the residual part of the assets
Once all the liabilities are deducted
That is, if you want to know the capital of a company
You just have to subtract the liabilities from its assets
This is how we reach the basic formula of Accounting
Which tells us that the total value of the asset
Is equal to the sum of the liability and the capital
This tells us that the asset of a company
Is financed with third-party funds, that is, the liabilities
And with own funds, that is, the capital or equity
In an upcoming video we'll tackle the balance sheet in more detail
And how it's made up and we'll look at some sample exercises
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