What is equity in accounting?

What exactly are 'Assets' , 'Liabilities' and 'Owner's Equity' in Accounting?

  • I am very new to Accounting and have to learn about it's basics, very quickly. So what are 'Assets' , 'Liabilities' and 'Owner's Equity' in Accounting? Please be simple in language as possible and provide an example if possible! Thnk u!

  • Answer:

    Assets = things that add value to the company such as cash, investments, accounts receivable, inventory, etc. Liabilities = things that reduce value to the company such as debts, accounts payable, etc. Equity = book value of the company. It is the difference between the value of the assets and the value of the liabilities.

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