What is Accounting in Laymans term?
Accounting can be understood easily by just looking at its basic formula which is Asset = Liabilities + Owner's Equity (A=L+OE). Now, What is asset? Well, asset is just everything that you own that can give benefits to you. Like for example, your cellphone, it is an asset to you because you will benefited from it. Liability on the other hand, is everything that you owe that will make you liable to pay in the future. If you paid your cellphone through installment basis, then it is your liability because you are held liable in paying it monthly. Then, the difference between asset and liability is called an equity. For equity is just the residual value.This three important elements should be probable - more likely to happen - and can be measured reliably.