Elements and Accounting Equation

• Assets


  resources a business owns or controls that are expected to provide future benefits
• liabilities


  Obligations owed by a business to others that are expected to be settled in the future
• Income


  amounts earned through activities of a business
• Equity


  the claim by the owner(s) on the net assets of a business

  - captial—contributions

  - profits or loss

  - Drawings—assets take by owner from business
• Expenses


  Cost incurred in the operation of a business to earn income in the same accounting period.
• Accounting Equation

  Total Assets = Total liabilities + Total Equity