Accounting Basics Lesson 4

What is an Asset? What is a Liability? What is Accounts Payable? What is Owners Equity? What are the Main Types of Accounting Accounts?

313 thoughts on “Accounting Basics Lesson 4

  1. Lytasha

    I would like to say thankyou, your videos have helped me with my studies. I knew nothing about this stuff before! So thankyou!

  2. Akila Bandara

    ya this is a good tutorials for the beginners of accounting side just like me……….thanx a lot………all the best for future tutorials

  3. Dan

    Thanks for the videos but you REALLY lost me on this one. How is a utility account “owner’s equity”. You don’t own your utilities so how can they be considered “part of the business that belongs to the owner, if you shut the business down”? Your utilities aren’t assets of the company. Further, in your example you enter a credit of $75 to the “Cash in Bank” account to show a decrease. Then you balance that with a debit to the Utilities account showing “a reduction to our owner’s equity”. But a debit is supposed to be an increase to an account, not a reduction. This terminology is very confusiong…

    1. Daniel Dickson Post author

      Check out my videos 2-3: that should clear up some of your questions in more detail. For now you need to know that debit does NOT always mean an increase and credit does NOT always mean a decrease. It depends on what type of account you are dealing with. For asset accounts a debit means an increase. For owner’s equity type accounts a debit means a decrease in owners equity. Utilities is an owner’s equity type account. It tells you how the payment of the utilities (from your bank account) is affecting your owner’s equity (aka owners wealth). So when you pay a utility bill you decrease your bank account (via a credit) and you also show a decrease to the wealth of the owners on the Utilities account (via a debit). Always always ask yourself what type of account you are dealing with (there are three main categories). I hope that helps. Again, the best thing to do is watch all my videos from the very beginning.

  4. rania ezzeddin

    hi danie
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    i am still in the begining later on i will have got a lot of comments

  5. Arabi

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  6. Anusha

    I really don’t have words to express my gratitude sir. The classes are really wonderful, i love to watch these videos for gaining knowledge on the subject. You are Great!!

  7. Lucero

    I am excited with your videos, this is great, I’m learning what I needed. Thank you very much for taking the time to us. I also like your English, because my interest is to learn accounting terms in this language.

  8. Wendy

    Your videos are realllllly helping me understand accounting so much more. The only question i have so far is, how come you decreased (debit) the utilities with a 75.00$ if you paid the bill in cash?

  9. Anna Cheluget

    I can’t even begin to say how thankful I am for you and your videos this class….. Understanding Accounting and Finance / Managerial Finance has made my life a living hell!!! attending lectures didn’t help cause the profs were super confusing and made major assumptions I had never done accounting and finance before!! but since watching your videos I can finally understand it and I feel confident about passing my exam Finally!!!! thank you for breaking it down and making accounting simple to understand. Thank you!!!!!

  10. Matt

    Thank you Daniel. I’ve been using Quickbooks for years on a couple different businesses as well we personal and I’ve been missing the 3 category distinction. Thanks for making it easy and accessible to learn.

  11. Carlos

    Thank you very much for crediting your personal time to sharing your knowledge of accounting with the general public. I can’t wait to start my school semester and push my skills to the next dimension. You have debited a very large amount knowledge to me that would have took time to learn in class. I now have the priviledge and opportunity to dominate my accounting courses so I can go fourth into more complex content. I wish you the best in your career!

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  12. Sandra

    thanks I appreciate this. I love the fact that I can pause the video and go back if I do not understand something. This is a great pace and I am understanding accounting more because of you. I am so glad that I do not have to be up underneath my asian friend to get some help for next semester. LolZ. Thanks again.

  13. Mariel

    thank you for this video…Accounting is one of the subject in my Program and I’ve been having a hard time understanding it. I discovered your website from Google (thank goodness for Google)! I will definitely go here a lot!

  14. Haya Hilton

    I just wanted to say that you are absolutely the best teacher ever. I have been struggling with financial accounting and now managerial accounting, and YOU are the answer! Your videos are simple, straight to the point, and very informative.
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  15. nick

    Dude! You have taken a subject that everyone is afraid of and made it simple and want to learn more. Congratulations.

  16. Eryn

    I am in a managerial accounting class right now and I was feeling completely underwater with my class. It seems that everything I learned in my financial accounting class went out of my head thanks for making it plain!

  17. Trudi Watts

    Your videos have been the easiest to understand. I knew the concept but didn’t quite get what columns to put them all in…Thank you so much…

  18. Chris Tuckett

    This video has been slightly trickier to understand than the earlier videos, but after watching it for the third time and taking notes it all makes sense. Thank you

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