small business grants

Let’s do some exercises for each of these I want you to tell me if a liability was affected if so did the liability increase or decrease stop this presentation now and do this exercise restart once you are done here we go number one a company borrows eighty five thousand from a bank he’s a liability affected yes since the company owes money to the bank you call it loan payable the liability increased to the company paid five thousand towards the loan was the liability effected the answer’s yes the liability that’s the loan payable decreased since the company paid part of the loan the liability decreased because they own less money to the bank third the company purchased eight thousand in office supplies on account was a liability effected yes the company bought an account so it owes money to a supplier the supplier is called accounts payable.

It’s a liability and here the liability increased received a utility bill for services is a liability affected answer is yes the liability is increased by the amount of the bill this is the money owing to a supplier so the answer is yes can call the liability utility payable and it increased are you comfortable up to now if so let’s proceed now we are coming to the more important part of this module we did assets we did liabilities now let’s go to equity.

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