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.
Mentioned in ?
References in periodicals archive ?
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
Using the basic accounting equation, the situation becomes clear.
Rethinking the audit
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
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.
CDA launches double entry accounting system
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?
Chinese fire drill: forget tinkering with the renminbi's dollar peg. The key is to increase consumption
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.
Sprouse's what-you-may-call-its: fundamental insight or monumental mistake?
Unfortunately, this part of the accounting equation is less well understood.
How can a vineyard Be carbon neutral?
The second chapter links the basic accounting equation to the business entity's financing, investing and operating activities and their measurement and reporting.
Financial Accounting Information for Decisions

Financial browser ?
Full browser ?