Liabilities: Amounts owned to not owners/outsiders
Owner’s Equity: The amount owed to the owners by the entity, to the non-owners.
Also defined as a residual interest. (A-L=O.E)
A business itself has no value, what makes a business valuable is it’s owners equity.
Balance Sheet: represents the financial position of the business at a specific point of
Income Statement: result of operations for a period of time, how did we perform?
O.E (End of Period) = O.E (Beginning of Period) + (Rev + Exp) – Distrib. To owners +