AccountingBLOCK

flexdeck · 03-07-2008, 04:47 PM

I am really confused about balance sheets...

If assets are supposed to equal liabilities what happens to all the stuff youve spent money on other than stock which has now been used ie business trips, stationary etc, it stands to reason more money would be invested in a company than it currently has, particularly in the 1st year.

bizark · 03-07-2008, 05:04 PM

I am confused about what you have just written

Maybe I am dumb lol

ZaddY · 03-07-2008, 05:10 PM

Sorry but your definition of assets is wrong.

The basic accounting equation is

Assets = Liabilities + Equity

Unless you add up both the liabilities and the equity, assets are not going to balance.

This is coming outright from my accounting 101 class

amd87 · 03-09-2008, 08:17 PM

Basic accounting equation

Assets = Liabilities + Equity

Other equation

Assets - Liabilities = Equity

BostonGuy · 05-12-2008, 12:14 PM

Quote:

Originally Posted by flexdeck

I am really confused about balance sheets...

If assets are supposed to equal liabilities what happens to all the stuff youve spent money on other than stock which has now been used ie business trips, stationary etc, it stands to reason more money would be invested in a company than it currently has, particularly in the 1st year.

Those are expenses on the income statement and will be reflected in your retained (deficit) earnings after the period close. The retained earnings are a component of stockholder's equity in the equity section of the balance sheet....

03-07-2008, 04:47 PM	#1 (permalink)
flexdeck Status: n00b Join Date: Mar 2008 Posts: 24 Credits: 339	Balance sheet confusions I am really confused about balance sheets... If assets are supposed to equal liabilities what happens to all the stuff youve spent money on other than stock which has now been used ie business trips, stationary etc, it stands to reason more money would be invested in a company than it currently has, particularly in the 1st year.

03-07-2008, 05:10 PM	#3 (permalink)
ZaddY Status: Owner/Administrator Join Date: Mar 2008 Location: Bay Area, CA Posts: 121 Credits: 3,606	Sorry but your definition of assets is wrong. The basic accounting equation is Assets = Liabilities + Equity Unless you add up both the liabilities and the equity, assets are not going to balance. This is coming outright from my accounting 101 class __________________ Owner Zindah, Inc. A.A Accounting B.S Accounting

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03-07-2008, 05:04 PM	#2 (permalink)
bizark Status: Getting feet wet Join Date: Mar 2008 Location: USA Posts: 39 Credits: 623	I am confused about what you have just written Maybe I am dumb lol

03-09-2008, 08:17 PM	#4 (permalink)
amd87 Status: n00b Join Date: Mar 2008 Posts: 13 Credits: 223	Basic accounting equation Assets = Liabilities + Equity Other equation Assets - Liabilities = Equity

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