-Explain the difference between assets, liabilities, owners equity, revenues and expenses.

Question

Question

business accounting

Answer 1

Answer #1

Assets	Liabilities	Revenues	Expenses	owners equity
Asset as something your company owns that can provide future economic benefits. Cash, inventory, accounts receivable, land, buildings, equipment – these are all assets.	Liabilities are your company's obligations – either money that must be paid or services that must be performed.	Revenue is money your company earns from conducting business. If you owned an ice-cream stand, for instance, revenue is what you get from customers who buy ice cream.	Expenses are the costs you incur to generate that revenue. The ingredients you buy to make the ice cream, the wages you pay your employees, the rent and utilities you pay for your stand – these are all expenses.	Owner’s equity, often called net assets, is the owners’ claim to company assets after all of the liabilities have been paid off. In other words, if the business assets were liquidated to pay off creditors, the excess money left over would be considered owner’s equity.

Answer 2

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