accounting equation

(redirected from Accounting Equations)

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.
Mentioned in ?
References in periodicals archive ?
It can neither be ignored that behind all numbers and accounting equations, real people exist -- our citizens for that matter, who are the ones affected by the economic recession throughout the European countries.
Quiz A quiz was designed for each of the six units, including accounting equations, accounting elements and accounts, accounting vouchers, daily journal, ledger, and trial balance.
Mr Raffarin said this month his job was 'to give the French people work' and not 'to present accounting equations and solve mathematical problems to please some bureau in another country'.