The accounting equation, the dual aspect, debits and credits, ledgers, the trial balance and the full accounting cycle from source document to financial statements.
The accounting equation
Every business is built on the accounting equation:
Capital is what the business owes the owner; liabilities are what it owes outsiders. Because every transaction is recorded twice (the dual aspect), the equation always balances. Rearranged, Capital = Assets − Liabilities, which gives the owner's net worth (equity).
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