On Thu, 27 Apr 2000 03:41:09 EDT, the world broke into rejoicing as
Buddha Buck <[EMAIL PROTECTED]> said:
> > > 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.
That is also backed up by the organization of the "Balance Sheet" in
a set of financial statements.
There is a section entitled "Assets," and there is a section entitled
"Liabilities and Shareholders' Equity."
And yes, indeed, the preference appears to be for there to be no
negative numbers in there.
--
Group Dynamics
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agents. A group is then a larger society of such agents. Understand
groups by examining interactions of coalitions of agents that
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-- Mark Miller
[EMAIL PROTECTED] - <http://www.hex.net/~cbbrowne/lsf.html>
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