Thursday, August 9, 2007

Funny Math

Here are two terms I've always had trouble with - and I think the reason is similar but I can't figure it out.

Zero Sum Game... shouldn't that be zero difference game? I mean, I understand that if there is a simple situation where you and I both have a dollar, and I take the dollar away from you and now I have two, that I gained 1, plus your negative 1, equals zero... but seriously. I think 1 - 1 = 0 is much easier to understand than 1 + (-1) = 0.

Accountants follow the same line of thinking with assets = liability + owner's equity. That just seems designed to be confusing. If you just shook it around a little bit and said owners equity = assets - liabilities. I think that's much easier to understand. What you've really got (equity) is the value of all your shit (assets) less what you owe (liability)... that's just common sense.

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