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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balance sheet identity

References in periodicals archive ?

a) We work in the accounting arena where the accounting equation must always be in balance: Assets = Liabilities + Owners Equity.

Win-Win Terms of Sale Negotiations: A New Way of Thinking About Terms Beyond Normal Terms

While I was endlessly typing and deleting, one of my introductory financial accounting students emailed me a question about the accounting equation. In answering, it clicked: I try to live my life according to the accounting equation, but slightly modified.

Balancing My Equation

For implementing the development accounting equation (3), our starting point is the Penn World Table.

The Composition of Capital and Cross-country Productivity Comparisons

But a human heart we do possess, and that is a passion present within the accounting equation that can never be replaced.

The Fourth Industrial Revolution: Accounting faces new challenges

Analyze the preceding transactions in terms of their effects on the accounting equation of Lewis Lawn Service.

Mixing Old and New Teaching Methods to Get Better Student Results

In the balance sheet the measurement of wealth is the difference between assets and liabilities, hence the link to the basic accounting equation.

Artifacts and Institutions of Financial Accounting

The ninth edition incorporates a transaction-effects equation format that illustrates how each transaction affects the accounting equation, the balance sheet, the income statement, and stockholder equity.

Using Financial Accounting Information: The Alternative to Debits and Credits, 9th Edition

Our model of stock market valuation is based on the basic accounting equation where earnings or distributable cash are used as a growth factor [Feltham and Ohlson, Contemporary, Accounting Research, 1995, 10(2), 689-731].

Non-GAAP reporting by REITs and other flow-through entities: reliability and valuation evidence

The governmental accounting version of the accounting equation can be defined as (assets + deferred outflows of resources) - (liabilities + deferred inflows of resources) = net position.

Back to basics: an overview of governmental accounting and financial reporting: everyone involved in overseeing or managing government operations needs to understand the basics of public-sector accounting and financial reporting

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.

Using the basic accounting equation to help students understand differences between the cash basis and accrual basis

What Yolles does not understand is the accounting equation for credit unions.

Special reserve for sleep apnea?

Section III presents the levels accounting equation of total factor productivity.

DETERMINANTS OF MANUFACTURING VALUE ADDED IN PAKISTAN: AN APPLICATION OF BOUNDS TESTING APPROACH TO COINTEGRATION