Question

explain the meaning of accounting equations and how are expenses and income account related to it

Answer 1

Answer:

The accounting equation or balance sheet equation forms the building blocks for the entire double entry accounting system. It shows that every asset owned by the company is equal to the claims (liabilities and equity) against the asset.

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.

mark as brainest