Recording transactions in the basic accounting equation.
• Assets Liabilities + Owner's Equity is the basic accounting equation.
Liabilities represent amounts owed to creditors.
• Capital does not mean cash.
In a shift of assets the composition of assets changes but the total of assets does not change.
Seeing how revenue, expenses, and withdrawals expand the basic accounting equation.
Revenue generates an inward flow of assets. Expenses generate an outward flow Of assets or a potential outward now.