ledger
A "book" containing
accounts. For example, there is the general ledger that
contains the balance sheet and income statement accounts. There is a subsidiary ledger that contains the detailed, customer
account balances for the general ledger account Accounts Receivable.
balance sheet
a
statement of the assets, liabilities, and capital of a business or other
organization at a particular point in time, detailing the balance of income and
expenditure over the preceding period.
Accounting Equation
Formula
=(Liabilities+Owner’s Equity)
Assets
Assets include cash and cash
equivalents or liquid assets, which may include Treasury
bills and certificates of deposit. Accounts receivables are the
amount of money owed to the company by its customers for the sale of its
product and service. Inventory is also considered an asset.
Liabilities
Liabilities are what a
company typically owes or needs to pay to keep the company running. Debt
including long-term debt are liabilities as well as rent, taxes,
utilities, salaries, and wages as well as dividends payable.
Shareholders' Equity
Shareholders' equity is a
company's total assets minus its total liabilities. Shareholders'
equity represents the amount of money that would be returned to shareholders if
all of the assets were liquidated and all of the company's debt
was paid off.