00:01
In this example, you've asked to look at different accounts and determine whether their assets, liabilities, or equity, and whether they have a normal debit or credit balance.
00:10
Let's highlight assets in green, liabilities in red, and equity in blue.
00:18
You've asked nine different accounts.
00:21
The first account that you've asked about is accounts payable.
00:25
Accounts payable is a liability.
00:27
Payable means you owe something.
00:30
Liabilities have a normal credit balance.
00:35
The second account that you've asked to analyze is accounts receivable.
00:40
Accounts receivable is when you are waiting on money from a customer.
00:44
It's an asset to us.
00:45
We're hoping to turn it into cash.
00:48
Assets have a normal debit balance.
00:52
Third account is capital.
00:58
Capital is an equity account and it has a normal credit balance.
01:05
The fourth account is drawings.
01:09
Drawings is an equity...