A description of the relationship between a company's assets, liabilities, and equity; expressed as Assets = Liabilities + Owner's Equity; also called the balance sheet equation.
This formula is at the heart of double-entry bookkeeping. Simply stated, Liabilities + Capital = Assets. Therefore an increase in assets must be accompanied by an equal increase in the liabilities and/or capital. This is the reason a Balance Sheet balances.
The balance sheet is based on the basic accounting equation. That is: Assets = Equities Equity of the company can be held by someone other than the owner. That is called a liability. Because we usually have some liabilities, the accounting equation is usually written: Assets = Liabilities + Owner's Equity
Simply stated, assets are equal to liabilities plus owners' equity.
the fundamental identity of the balance sheet: Assets = Liabilities + Owners' Equity.
The expression of the relationship between assets, liabilities, and owner's equity; it is most commonly stated as assets = liabilities + owner's equity.
The formula used to prepare a balance sheet: assets = liability + equity .
Assets = liabilities + owner's equity. The accounting equation is the basis for the financial statement called the balance sheet.
Assets = liabilities + owner's equity, or Owner's equity = assets - liabilities
Assets = Liabilities + Owner's Equity. For a corporation the equation is Assets = Liabilities + Stockholders' Equity. Because of double entry accounting this equation should be in balance at all times. The accounting equation is expressed in the financial statement known as the balance sheet. To learn more, see Explanation of Accounting Equation. To Top
The basic accounting equation is the foundation for the double-entry book-keeping system.