Assets are the valuable resources owned by a business . For financial the valuable resources are required . The the value of re sours and sours must be equal . The expression of the equality in the term of equation is known as accounting equation . An accounting equation is expressed as below :
Resource = source of finance
Resource denotes assets . capital & liabilities are included in the sours of finance .so the above equation can be expressed in the following ways too :
Assets = capital + liabilities
capital = assets - liabilities
Liabilities = Assets - capitals
Accounting equation is also known as balance sheet equation . Assets ,liabilities and capitals are three basic element of every business transaction .
Resource = source of finance
Resource denotes assets . capital & liabilities are included in the sours of finance .so the above equation can be expressed in the following ways too :
Assets = capital + liabilities
capital = assets - liabilities
Liabilities = Assets - capitals
Accounting equation is also known as balance sheet equation . Assets ,liabilities and capitals are three basic element of every business transaction .
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