We all learn these subjects/topics in school it all depends on how much of the info students retain. You also learn better by teaching. And hes a harvard grad so that explains a lot lol
His knowledge of various subjects has VERY little to do with his schooling. It has much more to do with the fact that he's dedicated his life to learning new things -- as we all should!
Although a lot of explanations start with Assets, I think the easiest term to begin with is Equity. Think of Equity as [stuff (you own) that you haven't borrowed]. Liabilities are [stuff you have borrowed]. Assets, then, is an artificial term standing for [stuff (you own) that you haven't borrowed] + [stuff you have borrowed]. Assets = [stuff you have borrowed] + [stuff (you own) that you haven't borrowed] A = L + E ===================== but some people might think that it is more intuitive to start with Assets and write: A - L = E And from this equation one can easily derive: A = L + E But the first explanation helps me understand better what Assets really are. Although, in the end it's all the same.
Great video. My one tip would be to have your assets and liabilities diagrams match your formula order (A= L + E). That's how I see it in other accounting basics videos.
As you go through the finance playlist, you can hear bits of the financial crisis unravel. Very interesting to hear it from the teacher as we learn about finance ^^
THE BEST TEACHER EVER ! THANK YOU Mr Khan for all your instructive videos. p.s. i consider my self a free person too , zero debt , i fully own my apartment , regular job and some money in E.T.F. Thanks again.
Sounds like me...talking about the economy at parties lol. Your videos have taught me the basis of the financial system and are quenching my thirst for the understanding that I've had before I discovered your tutorials. Thank you and have a blessed New Year.
hi you made balance sheet look very simple..cant get simpler than what you have explained.thanks a lot for making me understand basic concept of balance sheet.
7:24 - “My wife was complaining that I make these things very hard to read, but what can I do?” Well, the handwriting becomes neater and general readability improves in your later videos, for sure 😆
excellent stuff, Khan. Really broken down to simple and understandable language and pictures...for basics of credit management and accounting (with stuff like housing purchases etc). I have a degree in accounting...and I know that this stuff here is on mark...to get a general idea of the concepts. Anyway, keep up the good work...
You're really funny and intelligent, it's awesome. Don't get me wrong but what was funny to me was the way you got emotional talking about owing nothing to nobody :)
Liquid assets are assets that are easily converted to cash. Liquid assets include: stocks, bonds, other marketable securities, and of course cash. Liquidity is the simply the sum of all your liquid assets. Hope this helps
Where I'm from, assets go on the left-hand side of the balance sheet. Whereas, the liabilities and equity go on the right. Furthermore, the 'assets = liabilities + equity' formula is somewhat misleading. I say this, because, in order to utilise such a formula, you have to calculate the equity. And, equity is the last thing to calculate in a balance sheet. I was taught: equity = assets - liabilities. This way, it indicates what order you should complete the balance sheet in. In other words, calculate and add assets (or its monetary values) together. Then, calculate and add liabilities (or its monetary values) together. THEN, take the liabilities away from the assets, which will leave you with the equity.
+Lorenzo Franco Same here. That's how I've been taught it too. Debits (Assets) go on the left and Credits (Liabilities and Equity) go on the right side. Same formula as well.
Lorenzo Franco You took a loan of 750k from the bank, you had 250k in your hand. Total becomes 1000k which you pay to but the house for 1M. So, after buying the house, how do you have an equity of 250k? Just curious.
Your amazing! I learn and understand a lot more from you than from Uni. Subscribed :) hoping you make more accounting and finance videos, it was very helpful thanks
In most example balance sheets, I see equity is same as asset. In some cases, the equity is not the same as assets, but is the result of asset-liabilities?
Bigga You took a loan of 750k from the bank, you had 250k in your hand. Total becomes 1000k which you pay to but the house for 1M. So, after buying the house, how do you have an equity of 250k? Just curious.l
I hope the students of today realize how lucky they are. When I finished my Accounting degree there wasn't such thing as UA-cam and no such thing as ebooks that you can get at a blink of the eye. If the teacher was not so good teaching a subject, things could get really hard. You would need to hurry up to get a library book before everybody else. Also, usually students would gather to study together and if you were lucky, one guy that would know more about one given subject would try to explain to the rest of us and maybe we would take copies of his/her documents. Today, you just search the internet and usually everybody can find a lot of free information about almost any given subject.
In the traditional definitions of accounting anything you buy can be considered an asset because it has a value attached to it at the particular moment that you buy it. I'm assuming that you're using some professional's opinion on what an asset is (ex. Robert Kiyosaki)
Very late reply I know - sorry for digging this up! But wouldn't a house be considered premises or a fixed asset? I know it doesn't generate income but it's fixed and it does have a value even if you are paying bills and stuff. That's they way I've been doing it anyway!
My professor, with a PhD. in Accounting, couldn't explain this simple concept... but you could... and did it clearly. Thank you, Sal!
How do you know everything? One minute your teaching me about cellular respiration the next minute its finance. What went wrong with my childhood?
+neverwrest09 just read his biography, he was an MIT graduate in math, electrical engineering, and CS. Also has an MBA from Harvard business school
We all learn these subjects/topics in school it all depends on how much of the info students retain. You also learn better by teaching. And hes a harvard grad so that explains a lot lol
His knowledge of various subjects has VERY little to do with his schooling. It has much more to do with the fact that he's dedicated his life to learning new things -- as we all should!
lol
I was JUST wondering this
Wait this video is 16 years old? Yet so relatable 😮..
Sal you're really something else
Although a lot of explanations start with Assets, I think the easiest term to begin with is Equity.
Think of Equity as [stuff (you own) that you haven't borrowed].
Liabilities are [stuff you have borrowed].
Assets, then, is an artificial term standing for [stuff (you own) that you haven't borrowed] + [stuff you have borrowed].
Assets = [stuff you have borrowed] + [stuff (you own) that you haven't borrowed]
A = L + E
=====================
but some people might think that it is more intuitive to start with Assets and write:
A - L = E
And from this equation one can easily derive:
A = L + E
But the first explanation helps me understand better what Assets really are. Although, in the end it's all the same.
Your initial explanation makes equity sound like assets. It’s confusing imo.
Asset anything that puts money into your pocket every month while liability anything takes money away in your pocket
Funny how i learned to make balance sheet from you rather than my accounting professor lol
Me too😂
Maybe you should pay attention in class missy
Did he just use a stripper example xD 02:07
haha maybe he means like to pay for a Zumba instructor xDD
Thought I was the only one who caught that 😂
Only a filthy mind would think of a stripper.
@@bighands69 hahahaha
Khan Academy is on the level of Google in my opinion. I can't learn from text books as effectively as I'm learning from your videos! Just my .02
Khan Academy got me through grade 12 bio and im SOOO EXCITED that you have videos to help get me through accounting!! thanks so much for all you do!!
i love his voice it's perfect for learning somehow lol
I love this guy, “A hundred thousandaire” @ 8:09 lol.
Thank you sir.
This is really cool and entertaining man thanks for all the time you put into this!
My god this man is legendary. Here i was thinking he was just an amazing maths teacher, but no, he does accounting tutorials too! god bless you.
Taught me physics 101 in 2011, now watching Sal Khan again in 2021 waiting for the next market correction haha!
Hi Mr. Khan! Just wanted to thank you for helping me ace my education in business admin and economics. Couldn't have done it without you!
Simple and to the point!
I imagine Sal holding a sign saying, "Will dance for equity!" I like your videos. I actually understand them.
Great video. My one tip would be to have your assets and liabilities diagrams match your formula order (A= L + E). That's how I see it in other accounting basics videos.
As you go through the finance playlist, you can hear bits of the financial crisis unravel. Very interesting to hear it from the teacher as we learn about finance ^^
You're an awesome man Khan!
Thank you so much for helping us all!
Incredibly useful, and certainly life changing information!
THE BEST TEACHER EVER ! THANK YOU Mr Khan for all your instructive videos.
p.s. i consider my self a free person too , zero debt , i fully own my apartment , regular job and some money in E.T.F. Thanks again.
This guy will go to heaven!!
make someone dance for you....lol
Yes ballroom dancing is an excellent pass time. You can hire people to dance with you.
I think the memories from last night started to fade back into memory at an inconvenient point in time
You deserve to be called a teacher.
Sounds like me...talking about the economy at parties lol. Your videos have taught me the basis of the financial system and are quenching my thirst for the understanding that I've had before I discovered your tutorials. Thank you and have a blessed New Year.
I like your teaching style. So effective. You have really helped me in my studies in almost all my courses.
Man this guy is funny as hell...great videos, Im gonna take some of his finance advice and lapdance my debts away jajajaja.
Who is Sal paying to dance for him????????
hi you made balance sheet look very simple..cant get simpler than what you have explained.thanks a lot for making me understand basic concept of balance sheet.
Thank you so much for this video
6:00 part of banks made of granite and doing silly things is the highlight of the video!
I WOULD APPRECIATE MORE ACCOUNTING VIDEOS :(
i love using this videos as complements to my college courses!
im from 2022.
Thanks so much it’s so clear and helpful !
You are a boss man!! You are my study for business studies
I was 1 year old when this video came out and now I need it
This is the most informal (aka BEST) explanation ever Thankyou!
i loved your describtion of the bank.. the vids are very informative too
7:24 - “My wife was complaining that I make these things very hard to read, but what can I do?” Well, the handwriting becomes neater and general readability improves in your later videos, for sure 😆
Sir ur lecture design very beautifull.lecture deliver of balance sheet through examples sre awsums.
I got it everything
THANK.YOU
excellent stuff, Khan. Really broken down to simple and understandable language and pictures...for basics of credit management and accounting (with stuff like housing purchases etc). I have a degree in accounting...and I know that this stuff here is on mark...to get a general idea of the concepts. Anyway, keep up the good work...
You're really funny and intelligent, it's awesome. Don't get me wrong but what was funny to me was the way you got emotional talking about owing nothing to nobody :)
Kindly make complete course like economics on Accounting.
The concept of equity is starting to make a little more sense to me
ah finally taking another class where khan comes to the rescue
Being able to read and interpret a balance sheet is one of the most crucial elements that anyone in business should be able to do.
You're awesome. Makes a lot more sense now!
Good video
At least in Poland Assets are on the left-hand-side, liabilities on the right
at parties peoples eyes start to glaze over. Your killin me Sal!!
You saved me :') Thanks for teaching me in the clearest/ simplest way possible.
Robin Schaffer im taking acounting 101 with a professor who has a bad rating lol do you think i can pass just by watching his videos? have you?
U LIFESAVER SAL KHAN THANK U
Hope our teacher can teach Accounting like this video
Great tutorial! simple, easy, and correct!
Why aren't you teaching at my school????? :(
great stuff Mr. Khan. Thank you very much.
God bless you.
"use cash to make someone do something for you" right there i thought of strippers
...and then he said make someone dance for you XD
Liquid assets are assets that are easily converted to cash. Liquid assets include: stocks, bonds, other marketable securities, and of course cash.
Liquidity is the simply the sum of all your liquid assets.
Hope this helps
This is very well explained. Thank you.
Where I'm from, assets go on the left-hand side of the balance sheet. Whereas, the liabilities and equity go on the right.
Furthermore, the 'assets = liabilities + equity' formula is somewhat misleading. I say this, because, in order to utilise such a formula, you have to calculate the equity. And, equity is the last thing to calculate in a balance sheet.
I was taught: equity = assets - liabilities. This way, it indicates what order you should complete the balance sheet in. In other words, calculate and add assets (or its monetary values) together. Then, calculate and add liabilities (or its monetary values) together. THEN, take the liabilities away from the assets, which will leave you with the equity.
+Lorenzo Franco Same here. That's how I've been taught it too. Debits (Assets) go on the left and Credits (Liabilities and Equity) go on the right side. Same formula as well.
Cristina Carreiro Precisely, homie.
Lorenzo Franco You took a loan of 750k from the bank, you had 250k in your hand. Total becomes 1000k which you pay to but the house for 1M. So, after buying the house, how do you have an equity of 250k? Just curious.
Because the asset of the house amounts to $1m, which is broken down into a liability of $750k and an equity of $250k.
Asset(s) = Equity + Liability
great video thank you.
"I have an IOU to dance for someone in the future - it'll be hard to value"
That's because it's priceless! 🤣
great job..thank you for making this easy to digest
Thank you so much (:
God bless u
Great videos man thanks!
I Love You ! :D you are very smart, good in explaining and funny
Thank you!!
Thanks Sal!
Your amazing! I learn and understand a lot more from you than from Uni. Subscribed :) hoping you make more accounting and finance videos, it was very helpful thanks
Thanks, this was quite helpful :)
Love it! Damn wish I watched this earlier
Thanks ! From a French viewer who has a bad accounting teacher
ayo how this dude just be knowing things bruh
Subscribed...nice job
who needs a tutor, when i have you !!
it's more accurate to define assest as anything with monetary value.
thank u so much for this!!!!
“Make someone dance for you” perfect haha!
Wow! This is so old
mesmerising quote "banks do silly things"
Lol I used this is gcse, now in pre uni still needed this again lol
In most example balance sheets, I see equity is same as asset. In some cases, the equity is not the same as assets, but is the result of asset-liabilities?
Equity+Liabilities is equal to Assets.
Bigga You took a loan of 750k from the bank, you had 250k in your hand. Total becomes 1000k which you pay to but the house for 1M. So, after buying the house, how do you have an equity of 250k? Just curious.l
Surely your liability needs to include the interest you owe? Or does you represent that by increasing the liability as time passes?
anyone come from reading Rich Dad Poor Dad? I keep hearing Robert Kiyosaki's protests when ever Khan says the house is an asset haha.
Same! I kept cringing at his explanation.
You are a hero
lol @ "banks do silly things"
nice 2008 reference. me me chuckle and more interested in the video!
thank you.
thank you so much!!!
I have a question. When you take out a loan from a bank, say it's a 100k loan with interests, how do you account interests in your balance sheet?
Its considered equity because if the asset were to be liquidated that particular value would be left over after all liabilities are settled (I think).
Can you make a video about all the silly things the banks do? :)
GOOD
What playlist is this on? Any help would be appreciated, thanks.
Ted Carroll Finance
You are not lying... this dude is EVERYWHERE.... i got better chess because of him :/
Eyes start to glaze over.. lol. Great video!
@2:18, "I don't know if someone dancing to you is an economic benefit".
Tiktok: AM I A JOKE TO YOU?
can you have negative liabilities? such as when someone else owes you or is that an asset?
That would be something like an account receivable, which is an asset.
THANKS
I hope the students of today realize how lucky they are. When I finished my Accounting degree there wasn't such thing as UA-cam and no such thing as ebooks that you can get at a blink of the eye. If the teacher was not so good teaching a subject, things could get really hard. You would need to hurry up to get a library book before everybody else. Also, usually students would gather to study together and if you were lucky, one guy that would know more about one given subject would try to explain to the rest of us and maybe we would take copies of his/her documents. Today, you just search the internet and usually everybody can find a lot of free information about almost any given subject.
you should do all videos. Hilarious.
I love the content but some video is low quality idk if it's long time ago, like housing lesson, you should consider remake video and keep the audio.
managerial income statement pleez this woud be so help full
In the traditional definitions of accounting anything you buy can be considered an asset because it has a value attached to it at the particular moment that you buy it.
I'm assuming that you're using some professional's opinion on what an asset is (ex. Robert Kiyosaki)
Very late reply I know - sorry for digging this up! But wouldn't a house be considered premises or a fixed asset? I know it doesn't generate income but it's fixed and it does have a value even if you are paying bills and stuff. That's they way I've been doing it anyway!
wouldn't your liabilities be more than 750,000 dollars because of interest?