Anyone know about Accounting Equations?

I have a piece of work where I am meant to write down an accounting equation after transaction however I am totally stuck on how it's meant to be laid out? Can anyone on here help?

4 Answers

  • 1 decade ago
    Favorite Answer

    Well THE accounting equation is;

    Assets = liabilities + equity

    So for instance if one side of the equation changes (assets goes down) as shown;

    Dr Accounts payable

    Cr Cash

    then either liabilities or equity must go down; in this case liabilities goes down. [this isn't really a transaction but imagine a sale with COGS account etc. and how either/both assets, liabilities and equity change.

    If you want a more specific accounting equation add further details to your question :)

  • Anonymous
    7 years ago

    The financial position of a company is measured by the following items:

    Assets (what it owns)

    Liabilities (what it owes to others)

    Owner's Equity (the difference between assets and liabilities)

    The accounting equation (or basic accounting equation) offers us a simple way to understand how these three amounts relate to each other. The accounting equation for a sole proprietorship is:

    Assests = Liabilities + Owner's Equity

    The accounting equation for a corporation is:

    Assests = Liabilities + Stockholder's Equity

  • 1 decade ago

    The main accounting equation is Assets = Liabilities + Equity.

    Revenue - Costs = Profit

    Revenue - Expenses = Profit

    There are hundreds of other accounting related equations.

  • Phade3
    Lv 7
    1 decade ago

    Need more details !

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