In your own understanding and research, explain the accounting equation
Answer (1)
Answer:The accounting equation is a basic formula that shows how a company’s finances are balanced. It states that Assets = Liabilities + Equity, meaning everything the company owns (assets) is funded by either what it owes (liabilities) or the owner’s investment (equity). This equation ensures that all financial statements are in balance, reflecting that a company’s resources are financed either through debt or by the owner's contributions.
