Question

Accounting Equations
OBJECTIVES
After going through this chapter, students shall be able to :
Understand the meaning of accounting equation

Understand the concept of accounting equation
Know the impact of various transactions on accounting equation
Know the preparation of accounting equation
SYNOPSIS
Accounting Equation
• Meaning
Analysis of Business Transactions
MEANING
Accounting equation is a tool, with which equality of debits and credits can be
ascertained.
Accounting Equations are also known as Balance Sheet Equations since all the
components of Balance Sheet are depicted in them. It has two sides viz. 'Left Side' and
Right Side? Liabilities and Owner's Equities are to be shown on the right side of the
equation. Assets, however, are to be shown on the left side.
THE CONCEPT OF ACCOUNTING EQUATION
The concept of accounting equation can be easily understood in the context of
Balance (an instrument for weighing).
Balance Showing Accounting Equation
A balance has two dishes which are
equally balanced. Suppose, we put
some items on one dish. To equalize
both the dishes, we have to put some
items of same weight on the other side.
Similarly, if we remove some items
from any of the dish, then to equalize
both the dishes we have to remove
some items of equal weight from the Assets
Liabilities + capital
other dish.
4.3
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Answer 1

this much not easy to do know