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One of the key things we teach in our Accounting Made Easy program is the “Accounting Equation”
What is that?
Don’t worry…..most non-finance people frown when you ask this 😉
The Accounting Equation is the basis of Accounting literacy.
Its simple the formula were;
“Assets = Liabilities + Equity”
It means that assets which the business owns
=
The sum of funds we owe to lenders + the portion owed to the owners (what they have invested)
It always is in balance and is called the Balance sheet.
The reason its always in balance is that any transaction in a business has two entries meaning it impacts more than one element of the Accounting equation.
It may still be confusing to some but when you see it explained visually you will get the picture.
We visualise the learning of Accounting to empower non-finance people in Accounting literacy.
Learning Accounting should be fun….it can help you make better decisions and have better conversations at work.
I love explaining it this way to get non-Finance people to broaden their thinking when reading & interpreting financial information.
Join our 1 day Accounting Made Easy course to become Accounting literate.
Check out our 1 day Accounting Made Easy virtual training program.
