@julius.brown
The accounting equation, also known as the balance sheet equation, is a fundamental concept in accounting that represents the relationship between assets, liabilities, and owner's equity. It can be expressed as follows:
Assets = Liabilities + Owner's Equity
This equation shows that the total assets of a business must be equal to the total liabilities plus the owner's equity in order to maintain a balance. In other words, it states that the resources owned by a business (assets) are funded through a combination of debts or obligations to external parties (liabilities) and the investment or capital contributed by the owner(s) (owner's equity).