Question

what is accounting equation​

Answer 1

Explanation:

The accounting equation is considered to be the foundation of the double-entry accounting system. The accounting equation shows on a company's balance sheet whereby the total of all the company's assets equals the sum of the company's liabilities and shareholders' equity.

Calculating the Equation

The balance sheet holds the basis of the accounting equation:

Locate the company's total assets on the balance sheet for the period.

Total all liabilities, which should be a separate listing on the balance sheet.

Locate total shareholder's equity and add the number to total liabilities.

Total assets will equal the sum of liabilities and total equity.