Liabilities and equity are all the money that has been financed in a company. Liabilities also include all debts, as this is also how a company is often financed. For instance, a loan used to finance a business is a good example of a debt. Since a loan is financing from another person, this loan falls under debt. You can also owe yourself by investing money into your own business, this then falls under equity. But what are liabilities and equity more specifically?

Liabilities

What is liabilities and why is this such a strange term? In a nutshell, this is all your company's debts that do not come from your own savings. Loan capital is a sum of the VAT yet to be paid, creditors, and other debts. 

The 'unpaid VAT' is the amount calculated in the last quarter (Q4) for what the company has to remit to the Dutch Tax Office. In Gekko, this is always €0 if you haven't calculated the Q4 VAT report yet. Generally, the 'unpaid VAT' is made up of the turnover taxes owed minus the pre-paid VAT.

Under accounts payable, costs are listed that have not yet been paid, for example costs to your supplier. In Gekko, most costs that have been stored are seen as paid unless it is specifically stated that the type of transaction has not yet been paid or if the cost item is incomplete.

Finally, there are 'Other debts'. In Gekko, this is where you can manually specify debts that are not saved in Gekko. When you specify other debts, they reduce your equity, because the liabilities are increased.

Equity

Equity is the money you have invested yourself in your own business. 
The equity is calculated as a result of the most important calculation in accounting, namely Assets - Liabilities = Equity.
In Gekko, equity is calculated as follows:
The profit (at the bottom of the Profit & Loss overview) +/- the withdrawals / deposits (at the bottom of the financial statements) for the same year.