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 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.
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].
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.
Using the basic accounting equation, the situation becomes clear.
What Yolles does not understand is the accounting equation for credit unions.
Section III presents the levels accounting equation of total factor productivity.
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?
For most of us, among the very first subjects we were exposed to in the study of accounting was the fundamental accounting equation and the nature of its components--assets, liabilities and owners' equity.
Unfortunately, this part of the accounting equation is less well understood.
The second chapter links the basic accounting equation to the business entity's financing, investing and operating activities and their measurement and reporting.