# accounting equation

Also found in: Wikipedia.

## 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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
Mentioned in ?
References in periodicals archive ?
a) We work in the accounting arena where the accounting equation must always be in balance: Assets = Liabilities + Owners Equity.
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.
For implementing the development accounting equation (3), our starting point is the Penn World Table.
But a human heart we do possess, and that is a passion present within the accounting equation that can never be replaced.
Analyze the preceding transactions in terms of their effects on the accounting equation of Lewis Lawn Service.
In the balance sheet the measurement of wealth is the difference between assets and liabilities, hence the link to the basic accounting equation.
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.
What Yolles does not understand is the accounting equation for credit unions.
Section III presents the levels accounting equation of total factor productivity.

Site: Follow: Share:
Open / Close