Assets, liabilities, equity Essay

Accounting, per se, is establish on five types of accounts namely assets, liabilities, equity, income and expense. These account types belong either of the residual sheet accounts or Income and Expense accounts. Assets, liabiliites, and equity fall under the symmetry sheet account and the rest goes to the income and expense accoutnts. Definining each, asset is composed of a conference of things that an individual or an entity owns. These includes tangible items like car, cash or often stocks (intangible) and others that possess convertible values.On the other hand, liabilities atomic number 18 group of things on which an individual or an entity is indebted to. Loans and mortgages are the common examples of liabilities. Equity, is what we in like manner call net worth an amount that is represented to be the counterbalance after deducting the liabilities of an individuals or an entitys from its group of assets. Meanwhile, income is the homogeneous as profit something that you earn as payment from the time, work, or goods that you offered in exchange of money.Expenses include all those monetaries that were used to acquire the goods or services of someone else. Amongst various accounts in an entity, the stocks swap and replacement greets are the fundamental accounts that change when an entity assimilates to a corporate merger. Stock swap is oftentimes used in the accounts of a corporate merger since it does not proscribe the shareholders of merging companies to distribute among them the risk that is involved in the merging transaction. exchange cost, on the other hand is comes in when entities will employ cost in replacing that target company. However, replacment cost can only be true in most cases where an industry does not give services. References Investopedia ULC (2008) Mergers and Acquisitions Introduction. Retrieved November 17, 2008, from http//www. investopedia. com/university/mergers/default. asp viper Money Instructor (2005) Basic Accounting Terminology 101. Retrieved November 17, 2008, from http//www. moneyinstructor. com/art/basicaccounting. asp