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Forums › FIA Forums › FA2 Maintaining Financial Records Forums › expanding accounting equation
hi
can someone please explain how do you get from
capital=assets – liabilities
to
capital=opening net assets +profit- drawing
thanks
The first on is a snap-shot at any point in time.
The second one is a ‘journey’: closing capital = opening net assets + profit – drawings.
This explains how capital has changed over a period (note that opening net assets = opening capital)
thanks very much