Ledger: A group of accounts.
General Accounting Equation: Assets = Liabilities + Owner’s Equity
Assets: Items owned by the business that have a future worth
Liabilities: Debts of the business (or what the business owes)
Owner’s Equity: Net worth of the business (after deducting liabilities from assets)
Expenses: costs that are incurred running the business (e.g. rent, hydro)
Credit: recorded on the right side of a T-Account
Debit: recorded on the left side of a T-Account
T-Account: a simple account form used to demonstrate relationships between accounts and to show recording of Credits and Debits
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