Question

why is so that accounting equations is always satisfied after so many transactions?????

Answer 1

hey Maggie
here is ur answer
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because the value of the assets that the business controls, is always equal to the value of the money the business owes to the business’ funders.

The business’ funders include external funders (i.e. banks and suppliers) and internal funders (i.e. investors/owners). Accounting calls external funders ‘liabilities’ and internal funders ‘equity’. So the value of what has been entrusted to the business by the funders is equal to the value of what is owed by the business to the funders.

This situation is then represented in the accounting equation:

Assets = Liabilities + Equity

Accounting simply recognises the reality that a new business starts with nothing and that everything that the business comes to possess (assets) after its creation, was provided by others and so is owed back to them.

I hope this will help
if it's wrong then report .
#Prem✌✴✌✴