How to

What is a Balance Sheet? The Balance Sheet attempts to show how much the business is worth. It does this by illustrating the value of the business’s net assets. In order to do this, our balance sheet displays the difference between a business’s assets and liabilities. This difference is known as the business’s net assets…

What is Trial Balance? The Trial Balance is, as the name suggests, is a table where we lay out all our debit accounts and all our credit accounts to see if they balance or not. A trial balance is important because it acts as a summary of all of our accounts. By looking at our…

What is Capital Expenditure? Capital expenditure is when you purchase an asset. It might be a car, a house, a merry-go-round for your daughter, maybe even a submarine to use as your secret lab. Whatever it is, we label it as capital expenditure rather than an expense. An easy way to think of it is,…