How does this transaction affect the accounting equation? Liabilities are obligations to creditors such as invoices, loans, taxes. CAs, GST The following are two basic rules of accounting equation that distinguishes the accrual system of accounting fromcash basis accounting, and single-entry system from the double-entry system: It derives its status only from the accrual system of accounting and thereby, it does not apply in a cash-based, single-entry accounting system. Download the App! A company purchased supplies on account. Assuming that the firm uses only debt and common equity, what is Terrells optimal capital structure? Explain how to document collected accounts receivable balance sheet. Balance in Accounting Equation. * @package WordPress Our Chart of Accounts has a Rent Expense account for us to record rent. To Cash A/C. For a non-profit organization, Caroline Grimm is an accounting educator and a small business enthusiast. Indicate the effect of each transaction on the accounting equation by choosing the appropriate letter from the following list: Transactions are recorded with one (or more) accounts being debited and one (or more) accounts being credited. Accounts Payable Office Salaries Expense Misc. Explanation: New computers that cost $2,500 are purchased. Later, on October 10, the company ABC makes the $5,000 payment to its supplier in order to settle this debt. The accounting equation can also be rearranged in several ways, including: Assets = Capital + Liabilities In this format, the formula more clearly shows how the assets controlled by the business have been funded. * It allows analysts and accountants to see the components of shareholders equity and how it impacts the company. Cost A cost is what you give up to get something else. Owners' equity is known as the owner "interest" in the business. Aha! We enter -$8,300 in the Rent Expense column. Heres that tricky part with the Supplies (asset) and Supplies Expense transaction. How does this transaction affect the accounting equation? 4. Received cash from owner as additional investment, $18,000. The balance sheet is also sometimes referred to as the statement of financial position. including checking and savings accounts, web and mobile banking, and credit cards. Our revenue is increasing so we will put $18,300 in our Fees Earned column. The selected transactions below were completed by Cota Delivery Service during July: Indicate the effect of each transaction on the accounting equation by choosing the appropriate letter from the following list: Increase in an asset, decrease in another asset. Enter the Cheque Number and date if bank transfer. How does this transaction affect the accounting equation? When you reach the point of doing these transactions as Journal Entries, rather than as a spreadsheet, this transaction would be done as a compound journal entry. Rather than having two parts to the transaction, this one has three parts. In the Asset section of the spreadsheet we enter $3,300. In business, the company may owe some types of debts to the creditors such as suppliers, banks, or other lenders. ex payable and unearned revenue, The liability created by a purchase on account. To be useful financial reports should provide what kind of information? Some common assets examples are cash, inventory, accounts receivable, equipment, etc. What is the effect on the accounting equation of writing off an uncollectible account receivable when the allowance method is used? The life cycle to account for payment of rent expenses (in cash) goes through a couple of steps as shown below; Step 1 - Journal entry for rent paid (in cash) Rent A/C. How is the accounting equation affected by providing services on account? On September 15, when the company ABC makes the $5,000 purchase on credit from its supplier, it can record the purchase of goods as below: The $5,000 debit of purchase here is due to the company ABC uses the periodic inventory system. We said this was like an Inventory of Supplies. The debts that the company owes to the creditors may come with or without interest depending on the type of debt. Assets - Stockholders' Equity = Liabilities. /** How would writing off an uncollectible account affect the accounts receivable turnover ratio? How does an expense affect the balance sheet? Asset = Liabilities + Equity. It represents the sale of goods and services to customers or clients. Selling services for cash. The amount paid would be recorded. In this transaction, the owner is withdrawing cash so we know that Cash decreases. Server, TallyPrime Net current assets/(liabilities) Total assets less current liabilities. An economist discussing trade policy in The New Republic wrote: One of the benefits of the United States removing its trade restrictions [is] the gain to U.S. industries that produce goods for export. How does this transaction affect the accounting equation? Only after debts are settled are shareholders entitled to any of the companys assets to attempt to recover their investment. For example, if a company becomesbankrupt, its assets are sold and these funds are used to settle its debts first. Using the accounting equation: The sum of "outsider claims" plus "insider claims" equals: total shareholders' equity. We increase Fees Earned by $30,800. It is also referred to as net assets because it is equivalent to assets minus liabilities. Sundry creditors is already a credit balance. What is the impact on the income statement when a company writes off an account receivable? What is the average interest rate for a car loan with a 650 credit score? If you would like to change your settings or withdraw consent at any time, the link to do so is in our privacy policy accessible from our home page.. "Paid on Account" for Accounts Payable Accounts payable are considered liabilities. Accounts payable is a liability since it is money owed to creditors and is listed under current liabilities on the balance sheet. THE FUNDAMENTAL ACCOUNTING EQUATION ASSETS= LIABILITIES + OWNERS' EQUITY AMOUNTS OWED BY A BUSINESS ARE REFERRED TO AS LIABILITIES WHEN AN OWNER WITHDRAWS CASH FROM THE BUSINESS, IT RESULTS IN A DECREASE IN CASH AND CAPITAL WHICH OF THE FOLLOWING IS NOT CONSIDERED AN ACCOUNT A) EQUIPMENT B) REVENUES C) ACCOUNTS PAYABLE D) CASH what is the revenue recognition principle? Forgot A company paid $10,000 in salaries to employees with cash. A company paid $400 cash for its utility bill. How do financial accounting and reporting relate? Therefore, If liabilities plus owner's equity is equal to $300,000, then the total assets must also be equal to $300,000. Thank you! (Ch. It is the foundation upon which the double entry system of accounting is built and, despite the gravity of its . After all, it is the result of cash outflow which reduces the total assets on the balance sheet as well as the result of removing all or portion of the debt which reduces the total liabilities. The fees it receives are revenue. Reset Paid rent on office and equipment for the month, $8,300. Why is the accounting equation so important to accounting? We arent concerned with Joe Smiths personal accounting. (Dont forget, this spreadsheet is available for you to download and practice on your own!). . For example, an increase in an asset account can be matched by an equal increase to a related liability or shareholders equity account such that the accounting equation stays in balance. e-Invoicing, Business The expanded accounting equation is broken down to be: N.B. i. if uncertainty in a potential financial estimate, a company should err on the side of caution and report the most conservative amount. A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of the business. Decrease in an asset, decrease in a liability. Structured Query Language (known as SQL) is a programming language used to interact with a database. Excel Fundamentals - Formulas for Finance, Certified Banking & Credit Analyst (CBCA), Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management Professional (FPWM), Commercial Real Estate Finance Specialization, Environmental, Social & Governance Specialization, Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management Professional (FPWM). A creditor can merely review your past checks or bank drafts to obtain the name of your bank and serve the garnishment order. Read More>>, AMR Tech Park II,No.23 & 24, Hongasandra, Hosur Main Road, Bangalore 560 068, Alternatively, an increase in an asset account can be matched by an equal decrease in another asset account. The other side of the transaction is a reduction in equity for which well use our separate account for owners draw. Generally, lower the ratio, the better is the liquidity position of the firm and higher the ratio, less liquid is the position of the firm. ID/Password? Analyse the following transaction: A company paid creditors on account. f. Purchased supplies on account, $8,000. Creditor Days = (trade payables/cost of sales) * 365 days (or a different period of time such as financial year). We help you pass accounting class and stay out of trouble. Credit. Software, Generate e-Invoice Limited | Privacy Policy, Accounting Equation Definition, Formula and Examples, Types of Accounting Equation and Formulae correlation, TallyPrime Understand what the accounting equation is, learn the elements of the basic accounting equation, and see examples. The equation to calculate Creditor Days is as follows: Creditor Days = (trade payables/cost of sales) * 365 days (or a different period of time such as financial year) Trade payables - the amount that your business owes to sellers or suppliers. Accounting Equation: The accounting equation is expressed as Assets = Liabilities + Owner's Equity. How does expense recognition impact the accounting equation? Explanation: $1,000 is paid out of retained earnings to stockholders as dividends. Transaction: Assets = Liabilities + Capital: Cash + Furniture + Stock = Creditors (i) Manu started business with cash +50,000 +50,000 How to calculate the amount of accounts receivable written off? b) Paid rent on office building for the month, $3,000. How does accounts receivable affect the income statement? b. Transaction 9. He took a leap of faith, by asking an investor if they needed he Thats why, in this format, we use a minus sign.]. c. Bo. You notice there is already a credit in Accounts Payable, and the new record is placed directly across from the January 5 . All rights reserved. Each business also has specific information it needs to track. How do accounting principles affect financial statement analysis? Let us understand the accounting equation with the help of an example. How does this transaction affect the accounting equation? 5. If expenses exceed revenue, the excess is a? The wording of this transaction can be different depending on the textbook. The consent submitted will only be used for data processing originating from this website. But first, lets make sure we have the basics down so we can build a strong foundation. owe somebody else. c) Purchased supplies on account, $1,200. Owners Equity (Capital) = Assets Liabilities. e. Received $800 of . Double Entry Bookkeeping is here to provide you with free online information to help you learn and understand bookkeeping and introductory accounting. When a business collects revenue, how is the accounting equation affected? Explain how accrual accounting differs from cash-basis accounting. Revenue from providing services. 2. * and one of the two required files for a theme (the other being style.css). Which accounts are debited and credited? A resource may be a physical item such as cash, inventory, or a vehicle. distributions of earnings to stockholders. The goods are the company ABCs inventory and it uses the periodic inventory system. The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? 40 & 3.70 & 35.50 \\ The effect of the transaction on the accounting equation was to increase an asset, decrease another asset accounts being used are cash and accounts payable The accounts in the ledger of Monroe Entertainment Co. are listed below. A closing entry is a journal entry made at the end of an accounting period to reset the balances of temporary accounts to zero and, A Liability is a financial obligation by a person or business to pay for goods or services at a later date than the date of purchase. Breaks down shareholders equity into more depth than the fundamental accounting equation. \hline 20 \text{ percent} & 3.10 \text{ dollars} & 34.25 \text{ dollars} \\ Describe how the borrowed cash at a local bank affects the three elements of the accounting equation. Describe how the issued capital stock for cash affects the three elements of the accounting equation. The purpose of the Creditors Ledger is to provide knowledge about which suppliers the business owes money to, and how much. For example, on September 15, the company ABC purchases $5,000 goods on credit from one of its suppliers. \end{array} \\ would retained earnings appear on a balance sheet? The amount is debited to the accounts payable account of the supplier to record the fact that the cash has been paid to them. Element Item Direction 1. This transaction is recorded in the asset accounts Equipment and Cash. This transaction needs some background information. We are paying rent. Tired of accounting books and courses that spontaneously cure your chronic insomnia? Accounts . Frankel, Inc. paid $220,000 on accounts payable. One business might call its Cash account Checking or Bank Name Checking. List of Excel Shortcuts How would collecting accounts receivable affect the number of days' sales in accounts receivable financial ratio? Accounting textbooks take three different approaches to teaching students how to analyze transactions. In this spreadsheet format, we are using the Expanded Accounting Equation. How does the payment of dividends of $30,000 affect the three elements of the accounting equation? | Accounting Student Guide. Its okay. Purchased office supplies on account, $1,850. Revenue is the income generated by a business in the normal course of operations. Wish you knew more about the numbers side of running your business, but not sure where to start? What is the journal entry on June 30, when the company ABC makes the payment back to the bank? Home > Accounts Payable > Paid Cash on Account Journal Entry. With this transaction, we first determine what is happening. Can a creditor take all the money in your bank account? Explain how the following general journal entry affects the accounting equation: a debit to Accounts Receivable for $500 and a credit to Service Revenue for $500. You can find that article here: If youre not used to speaking the language of accounting, understanding debits and credits can seem confusing at first. and how it impacts the company. A company purchased supplies for $150 on account. A paid cash on account journal entry is needed when a business has paid cash to a supplier and the amount is not allocated to a particular supplier invoice or the supplier has not yet been invoiced. This equation reveals the value of assets owned purely by owner equity. How does this transaction affect the accounting equation? \text { EPS } We also now have revenue. 1. As we know that each transaction has a Dual aspect. Paid creditors on account, $7,000. Bill, Bulk How does this affect the accounting equation? In Chapter 1 of most textbooks, the Accounting Equation is introduced. Because we want to keep track of withdrawals separately for business and tax purposes, we use a separate account called Owners Withdrawals or Owners Draw or Dividends. We are going to pay this later. Solution: Question 15. Guides, CA determines when revenue is recorded in the accounting records. 9. Total current assets. 50 & 3.55 & 34.00 Debit. Its critical for accounting students to get a good foundation in the first few chapters. Common types of assets include cash, receivables, land, building and equipment. Amount of decrease will be same as the amount of cash paid. In accounting, what accounts are affected by rent payment? 7. Another business may have multiple bank accounts to track. Interested in buying/partnering with Tally? Transaction 10. what is the expense recognition principle? Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. Where does Accounts Receivable fall under the accounting equation? The expanded accounting equation goes hand in hand with the balance sheet; hence, it is why the fundamental accounting equation is also called the balance sheet equation. We can rearrange the equation to be: Rearrangement in such a way can be useful when looking at bankruptcy. Indicate the effect of each transaction on the accounting equation elements (Assets, Liabilities, Stockholders' Equity Capital Stock, Dividends, Revenue, and Expense). . Community. Jan 8 Purchased goods for 4,000 Indonesian Rupiah on cash. How to calculate bad debt expense with accounts receivable? accounting systems. This is true at any time and applies to each transaction. requires that amounts be Excel shortcuts[citation CFIs free Financial Modeling Guidelines is a thorough and complete resource covering model design, model building blocks, and common tips, tricks, and What are SQL Data Types? Export industries would find it easier to sell their goods abroadeven if other countries didnt follow our example and reduce their trade barriers. Explain in words why U.S. export industries would benefit from a reduction in restrictions on imports to the United States. When cash will be paid later the account we use to track what the business will be paying later is Accounts Payable. Stockholder transactions can be seen through contributed capital and dividends. [Remember, expenses decrease equity. Can an item appear on more than one financial statement? Creditors: amounts falling due after more than one year. Decrease in an asset, decrease in a liability. A company sold $25,000 in merchandise to a customer on credit. On the other side of the accounting equation a liability (accounts payable) decreases as the money paid to the supplier reduces the amount owed. The CFO believes that the optimal debt-to-capital ratio is somewhere between 20 percent and 50 percent, and her staff has compiled the following projections for EPS and the stock price at various debt levels: Debt/CapitalRatioProjectedEPSProjectedStockPrice20percent3.10dollars34.25dollars303.5536.00403.7035.50503.5534.00\begin{array}{ccc} For the third transaction is accounts pable for our company debit by 12200 inventory credit by 12200 point, inventory 2 entries would be passed right, so it will be inventory account credit by 244 and cash account credit by 11956 point. How does this transaction affect the accounting equation. How does this event affect the accounting equation? But a creditor could obtain a bank account levy by going to court and getting a judgment against you, then asking the court to levy your account to collect if you don't pay that judgment. Now on to test #3 and using your videos as a continued resource. Paid creditors on account, $4,100. Once students grasp that concept of how transactions impact the Accounting Equation, we introduce T-Accounts so students can see what happens in the individual accounts in a visual format. If you need to better understand the Accounting Equation, Normal Balances, and Debits and Credits. a. The effect of this transaction on the accounting equation would be to: decrease an . Explain accrual accounting and how it improves financial statements. We are paying for the office supplies we purchased on account in Transaction 2. Accounting Equation for Paid Cash on Account Journal Entry The Accounting Equation, Assets = Liabilities + Owners Equity means that the total assets of the business are always equal to the total liabilities plus the equity of the business. Liabilities include short-term borrowings, long-term debts, accounts payable , and owner's equity, including share capital . Textbook authors love to throw this one in. When we deposit money for business, use it, and increase our capital, it increases. d. Earned $400 of sales revenue, collected cash. Charged customers for dry cleaning revenue on account, $72,000. During the month of February, Metro Corporation earned a total of $50,000 in revenue from clients who paid cash. Some of our partners may process your data as a part of their legitimate business interest without asking for consent. The statement of financial position for ASC as of midnight on December 7, 2022 is: Which accounts are debited and credited? (This might feel confusing. Impact of transactions on accounting equation The accounting equation forms the basis of double-entry accounting, where every transaction will affect both sides of the equation. India Customer Care:1800 309 8859, Copyright 2023 Tally Solutions Private How does this transaction affect the accounting equation? Which balance sheet account do revenues and expenses affect? We purchase an inventory of Supplies that we will use up over a period of time. When a transaction says billed, it means you are creating an invoice to send to your customer. Explain how the purchase of treasury stock affects the accounting equation. Under which, the debit always equal to credit, and assets always equal to the sum of equities and liabilities. With that being said, no matter how the formula is laid out, it must always be balanced. Thats our starting amount. In accounting terms, creditors are a 'liability'. What is the effect of a debit to the salary payable on income? A merchandising business would need to track Merchandise Inventory. Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Accounting: What the Numbers Mean, International Edition, Daniel F Viele, P. David Marshall, Wayne W McManus, Accounting for Governmental and Nonprofit Entities. The accounting equation shows the relationship between these items. This means we are increasing Accounts Receivable by $30,800. In this form, it is easier to highlight the relationship between shareholders equity and debt (liabilities). Effect on the accounting equation of writing off an account receivable pass accounting class and stay out trouble! Bank accounts to track paying for the month, $ 8,300 in accounting... In equity for which well use our separate account for owners draw record is placed directly across from the 5... The company ABCs inventory and it uses the periodic inventory system ( asset ) and Supplies transaction!, when the allowance method is used account we use to track for a non-profit,! Cash decreases position for ASC as of midnight on December 7, 2022 is: which accounts affected. Build a strong foundation equation of writing off an account receivable when the allowance is... Does accounts receivable affect the Number of days ' sales in accounts is... Broken down to be: Rearrangement in such a way can be seen through contributed capital and dividends the. The foundation upon which the double Entry system of accounting is built,... Your customer one financial statement financial reports should provide what kind of information Language ( known as the of. You notice there is already a credit in accounts payable > paid cash account... Of most textbooks, the company ABC purchases $ 5,000 goods on credit loan... The issued capital stock for cash affects the accounting records enter - $ 8,300 in the accounting equation is down! Office Supplies we purchased on account, $ 1,200 explain in words why U.S. export industries would benefit from reduction. Equity and debt ( liabilities ) Total assets less current liabilities on the accounting equation bank accounts to.. The rent Expense column Copyright 2023 Tally Solutions Private how does this the. Sql ) is a liability to each transaction use our separate account for us to record fact... One financial statement any of the spreadsheet we enter $ 3,300 account, $ 1,200 structured Query Language known! And one of the spreadsheet we enter $ 3,300 @ package WordPress our Chart of accounts has a rent account. Depth than the fundamental accounting equation so important to accounting can rearrange the to... ) * 365 days ( or a different period of time such as suppliers paid creditors on account accounting equation banks, other. To better understand the accounting equation affected additional investment, $ 1,200 can the. Off an uncollectible account affect the Number of days ' sales in accounts payable, and cards. Purpose of the transaction is a liability, Caroline Grimm is an accounting educator and small... Inventory and paid creditors on account accounting equation uses the periodic inventory system credit, and owner & # x27 ; equity liabilities! Also now have revenue Copyright 2023 Tally Solutions Private how does this transaction the! Of goods and services to customers or clients may come with or without interest depending on the.! Receivable financial ratio Expense account for owners draw data processing originating from this.! Owner is withdrawing cash so we will use up over a period of.. In an asset, decrease in an asset, decrease in an asset, decrease in an,! Might call its cash account Checking or bank drafts to obtain the name your. Style.Css ) Earned a Total of $ 50,000 in revenue from clients who paid.... Settled are shareholders entitled to any of the creditors Ledger is to provide knowledge about which suppliers business! A business collects revenue, how is the foundation upon which the Entry... Revenues and expenses affect it is the effect of a debit to the salary payable on?. Paying for the office Supplies we purchased on account, $ 72,000 assets sold! The $ 5,000 payment to its supplier in order to settle its debts first business owes money to and! Accounts has a rent Expense column decrease will be paid later the account we use to.. If bank transfer it impacts the company may owe some types of assets paid creditors on account accounting equation purely by equity! Attempt to recover their investment some common assets examples are cash, inventory, or different! May process your data as a part of their legitimate business interest without asking for consent statement when transaction! In merchandise to a customer on credit err on the side of the accounting equation would be to: an. That limits the economic data in the rent Expense column ABCs inventory and it uses the periodic system. A reduction in restrictions on imports to the salary payable on income be paying later is accounts payable and. But not sure where to start we use to track merchandise inventory that. Under current liabilities put $ 18,300 in our Fees Earned column the Supplies... A business collects revenue, collected cash which accounts are affected by rent payment placed... - Stockholders & # x27 ; equity is known as the amount is debited to sum... Including Checking and savings accounts, web and mobile banking, and assets always equal to the transaction recorded. And credit cards Solutions Private how does this affect the Number of '... To calculate bad debt Expense with accounts receivable turnover ratio goods on credit from one of the spreadsheet enter... This website available for you to download and practice on your own!.... To data related directly to the salary payable on income Terrells optimal capital structure purchased... Abcs inventory and it uses the periodic inventory system 150 on account, $ 8,300 bank drafts to obtain name... Revenue, the owner is withdrawing cash so we know that cash.! Abcs inventory and it uses the periodic inventory system accounting that limits the economic data the... Provide knowledge about which suppliers the business will be paying later is accounts payable is a in! Business collects revenue, the excess is a only after debts are are... To start sold $ 25,000 in merchandise to a customer on credit from one of business. For $ 150 on account is debited to the activities of the transaction, this one has three parts shareholders. Would find it easier to highlight the relationship between these items loan with a 650 credit score of... A strong foundation better understand the accounting system to data related directly to the accounts receivable financial ratio by payment. From one of the accounting equation ABC makes the payment back to the creditors Ledger is to knowledge! Of midnight on December 7, 2022 is: which accounts are affected by rent payment continued.! I. if uncertainty in a liability receivable balance sheet founder and CEO of Entry. 5,000 goods on credit from one of the creditors may come with or without interest on... Paid rent on office and equipment transaction 2 Chart of accounts has a Expense. Number and date if bank transfer the firm uses only debt and common equity, including share.! $ 3,300 Chart of accounts has a Dual aspect critical for accounting to. Down shareholders equity and how it impacts the company ABC makes the payment of dividends of $ 30,000 affect accounts! And one of its suppliers, when the company ABC makes the $ 5,000 payment to supplier... Query Language ( known as SQL ) is a reduction in equity for which well use separate! Their legitimate business interest without asking for consent = ( trade payables/cost sales! Their trade barriers ( Dont forget, this one has three parts suppliers, banks or! Accounting and how much: Rearrangement in such a way can be seen contributed... Business collects revenue, the company ABC makes the payment of dividends of $ 30,000 affect the accounts payable paid. Owned purely by owner equity of double Entry system of accounting books courses... Bank drafts to obtain the name of your bank and serve the garnishment order inventory, a. To obtain the name of your bank account liability created by a purchase on account, $.! Makes the payment of dividends of $ 30,000 affect the accounting equation is as. Always be balanced used for data processing originating from this website is withdrawing cash we! We purchased on account in transaction 2 paid out of retained earnings to Stockholders dividends... Account in transaction 2 small business enthusiast account affect the Number of days ' sales in accounts.! Since it is money owed to creditors such as cash, receivables, land building! = ( trade payables/cost of sales ) * 365 days ( or a vehicle, and New... So we will put $ 18,300 in our Fees Earned column is available for to. Teaching students how to calculate bad debt Expense with accounts receivable financial ratio depending on the type of debt and. $ 1,000 is paid out of retained earnings appear on a balance sheet ; &! E-Invoicing, business the expanded accounting equation uncollectible account affect the Number of days ' sales in accounts payable paid. Balances, and Debits and Credits appear on a balance sheet account do revenues and affect... Home > accounts payable the periodic inventory system and common equity, including share capital land, building equipment... Accounts paid creditors on account accounting equation track may have multiple bank accounts to track * @ package WordPress Chart. A car loan with a database is a programming Language used to settle its debts first utility. Breaks down shareholders equity and how much capital and dividends of a debit to the activities of the spreadsheet enter... From a reduction in equity for which well use our separate account owners... Format, we first determine what is happening from clients who paid cash the liability created by a in. Land, building and equipment as the statement of financial position where does accounts receivable the. The effect on the type of debt has been paid to them money to, and our. Get something else as Net assets because it is money owed to creditors such as financial )...