accounting equation


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Accounting Equation

A brief equation describing the relationship between the assets and the liabilities of a company. In other words, the accounting equation describes how a company's resources relate to the persons or entities with claims on those resources. It is stated as:

Assets = Liabilities + Owners' Equity.

accounting equation

the idea that capital is equal to assets minus liabilities, and thus may be expressed as C = A – L. This may also be described as ‘the balance sheet identity’. See BALANCE SHEET.
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The governmental accounting version of the accounting equation can be defined as (assets + deferred outflows of resources) - (liabilities + deferred inflows of resources) = net position.
At this point in a student's career, he or she is still getting accustomed to the basic accounting equation as well as accounting terminology and procedures.
What Yolles does not understand is the accounting equation for credit unions.
The accounting equation serves as a kind of error-detection system: if at any point the sum of debits does not equal the corresponding sum of credits, an error has occurred.
The inevitable question that needs to be asked is why doesn't China's leadership--the political bureau of the standing committee (PBSC) of the Communist party, and the State Council of the Chinese government--move aggressively to boost domestic consumption, thereby changing the parameters of the accounting equation, enhancing the government's popular appeal, complying with China's formal commitment to "rebalance" its international accounts, and modestly shrinking China's current account surplus?
The second chapter links the basic accounting equation to the business entity's financing, investing and operating activities and their measurement and reporting.
So in the federal context, the basic accounting equation typically is written like this:
y] into the growth accounting equation (3), we find that the rate of output growth (as well as of consumption, investment, and capital growth) is equal to the rate of labor-augmenting technical progress.
Still, from the standpoint of the accounting equation, the books were in balance.
That's the new accounting equation for financial professionals' survival.
Accountants should be familiar with this method, because an accounting equation forms its basis.