Working capital is widely misunderstood

Accounting framework showing components of working capital

Working capital is a widely used but often misunderstood term. To teach it well, the term needs careful scrutiny. The problem starts, as it usually does, with language. “Working” isn’t helpful—we don’t have non-working capital, but working capital suggests that it works and the rest of capital doesn’t. “Capital” is ambiguous and slippery—if you hear… Continue reading Working capital is widely misunderstood

Phenomenon-based learning

Liz Marsalnd

Accounting Cafe online seminar on 19 November 2021 Liz Marsland, Queensland University of Technology (45 mins) Liz Marsland is a trailblazer in phenomenon-based learning. She unpacks the methods, the challenges and the benefits to students and teachers in using this multi-disciplinary approach that has wide application across subject areas and throughout educational levels. Elizabeth Marsland,… Continue reading Phenomenon-based learning

The nature of equity

A pictorial presentation of a balance sheet showing assets of £50,000, liabilities of £30,000 and equity of £20,000.

Of the five financial statement elements, equity is the most mercurial. In part, because it's a function of recognised assets less recognised liabilities, simply expressed in this form of the accounting equation. Assets – Liabilities = Equity (net assets) It’s this residual aspect of equity that makes balance sheets balance. They balance because equity is… Continue reading The nature of equity