The accounting equation illustrates the relationship between a company's assets and the claims that creditors and investors have on those assets. The equation is the basic structure on which a company ...

The expanded accounting equation builds upon the basic accounting equation's use of assets, liabilities and equity by incorporating additional components such as revenues, expenses and withdrawals.

A bedrock principle of business bookkeeping is that the accounting equation must always balance: Your assets must always equal your liabilities plus your owner's equity. When your business becomes a ...

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