The Simplicity of Accounting Explained

Accounting is literally just a giant equation and once you crack it everything makes sense.

Assets equal liabilities plus equity. That's it. When your assets go up by five but

equity drops by two, assets still increase by three because liabilities jumped

by five. Here's the wild part: every single transaction in business follows this rule.

Customer buys a gift card? That's deferred revenue, a liability.

They use it later? Now it's actual revenue. Sell something on credit?

Accounts receivable goes up, then cash replaces it when they pay. The whole financial

world runs on this one formula and most people never realize how simple it actually is once