what is accounting equation
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The accounting equation, also known as the balance sheet equation, is Assets = Liabilities + Equity and underpins the balance sheet's foundation. The accounting equation is the foundation of double-entry accounting, and displays that all assets are financed by borrowing money or paying with the money of the company's shareholders. The balance sheet is a complex display of this equation, showing that the total assets of a company are equal to the total of liabilities and shareholder equity, or said differently, all uses of capital (assets) are equal to all sources capital (debt: liabilities and equity: shareholders' equity
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