Even though Accounting isn't for just anybody
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There are basic concepts that absolutely everyone should know
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Whether we are entrepreneurs, employees
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Or we simply want to keep better control of our finances
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This is the case of the concepts of asset, liability and capital
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Stay to watch the video to easily understand these concepts
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The asset, liability and capital are the main elements
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That make up the balance sheet
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That is one of the most important financial statements of companies
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Let's start with the concept of assets
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Assets are the total resources that a company has
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To carry out its operations
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That is, all the goods, investments and rights that are owned by the company
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Assets, in turn, are mainly divided into current assets
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Fixed assets and deferred assets
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Current assets are all temporary goods and rights
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Or convertible into cash within twelve months
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That is, current assets are the ones that have the highest liquidity
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Some examples of current assets are
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Cash, that is, cash on hand
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Banks, that is, the money that's held in bank accounts
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Merchandise, among others
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Now let's move on to fixed assets
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Fixed assets or non-current assets
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Are the goods that the company usually keeps for more than one year
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These assets are harder to turn into cash
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That is, they have little liquidity
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Examples of fixed assets would be
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Land, buildings, machinery, furniture, equipment
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And any other asset that the company keeps long term
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For its part, deferred assets are made up of expenses
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That have been paid in advance
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That is, some good or service has already been paid for
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But it still hasn't been used
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Having finished with assets, let's move on to liabilities
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Liabilities represent the sum of the debts and obligations
That a company has taken on
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These are mainly divided into current liabilities
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Fixed liabilities and deferred liabilities
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Current liabilities represent all the debts and obligations
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That is, obligations that must be paid in less than one year
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For example: suppliers, creditors and notes payable
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Fixed liabilities, on the other hand, include all long-term debts
That is, over more than one year
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Such as mortgage creditors and long-term loans
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Deferred liabilities, for their part, are all those collections
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That have been made in advance
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For goods or services that we still haven't provided
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That is, we owe the good or service
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Once the concepts of asset and liability are understood
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We can move on to capital, also known as equity
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Capital is the equity of a company's shareholders
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That is, the residual part of the assets
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Once all the liabilities are deducted
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That is, if you want to know the capital of a company
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You just have to subtract the liabilities from its assets
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This is how we reach the basic formula of Accounting
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Which tells us that the total value of the asset
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Is equal to the sum of the liability and the capital
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This tells us that the asset of a company
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Is financed with third-party funds, that is, the liabilities
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And with own funds, that is, the capital or equity
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In an upcoming video we'll tackle the balance sheet in more detail
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And how it's made up and we'll look at some sample exercises
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