Question

describe the fundamental accounting equation. how are revenue and expense account related to it?

Answer 1

The fundamental accounting equation is assets= capital + liabilities.
As every accounting equation has two effects( debit and credit). Revenues lead to increase in assets or capital while expenses reduce assets and may also create liability. Revenue and expenses, therefore, are the reasons for stability and soundness of the balance sheet.

Answer 2

The fundamental accounting equation is assets= capital + liabilities. ... Revenues lead to increase in assets or capital while expenses reduce assets and may also create liability. Revenue and expenses, therefore, are the reasons for stability and soundness of the balance sheet.