In your own words, explain the recording process and the accounting equation

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Discussion

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• In your own words, explain the recording process and the accounting equation to someone who has no accounting experience.
• Then, give your opinion on the elements or areas that might cause the most confusion or be the most difficult to grasp.
• Provide support for your conclusion.

Statement

• In your own words, explain the recording process and the accounting equation to someone who has no accounting experience.
• Then, give your opinion on the elements or areas that might cause the most confusion or be the most difficult to grasp.
• Provide support for your conclusion.

The recording process is when you record all funds coming in and going out. It’s an account of what has been paid, what need to get paid and how it’s paid. It’s similar to a bank account. You have money in your account but yet you need to pay bills, that’s where the bank account ledger comes in.

The accounting equation is Assets=liabilities +equity. When I bought my house (asset), I borrow from my 401k (equity) for the down payment  to get the loan for the mortgage (liability).

To me, the accounting equation is more confusion. I understand the assets, liability and equity but it seem to difficult to break it down in that manner when I think it’s easier to just record what I have and what I spent and keep track like that.