Re:90% of My Skills Are Now Worth $0
by drc500free on Wednesday April 19, 2023 @08:18PM
(#35634907)
That's great! I didn't really grok accrual accounting until I realized that non cash "accounts" are explanations for why there is extra cash or missing cash.
When I stopped thinking about an asset as "a truck" and started thinking of it as "an explanation that cash is missing because we bought a truck" it all clicked.
Before that I thought of assets and revenues as good, and liabilities and expenses as bad. I couldn't make sense of why an asset turns into a liability instead of into a revenue. It's similar to learning intro physics and trying to understand how anything moves if every force generates an opposite force.
When I stopped thinking about an asset as "a truck" and started thinking of it as "an explanation that cash is missing because we bought a truck" it all clicked.
Before that I thought of assets and revenues as good, and liabilities and expenses as bad. I couldn't make sense of why an asset turns into a liability instead of into a revenue. It's similar to learning intro physics and trying to understand how anything moves if every force generates an opposite force.