> > I bet Linas is winding up for his knockout explanation of exactly what
> > Equity accounts are all about, so I'll leave him to it.
>
> assets - liabilities == equity
>
> (to be actually accounting-wise correct, its actually
> liabilities - assets == equity which is why debits increase assets, but
> thats a whole nuther story, which I think we go to the end of.)
Hmm... Every book on accounting I've seen says the basic equation is:
Assets == Liabilities + Equity
which is algebraically the same as your first equation, but
sign-reversed from your second. It also ties in better with my theory
that the 13th century accountants who invented double-entry accounting
didn't like subtraction, and the incombant risk of negative numbers.
>
> --linas
>
>
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