paid $ 2.600 for advertising
what is the accounting equation?
The accounting equation, also known as the balance sheet equation, is the fundamental equation in accounting that represents the relationship between a company's assets, liabilities, and owner's equity. It is expressed as follows:
Assets = Liabilities + Owner's Equity
To determine the accounting equation in this scenario, you need more information. The payment of $2,600 for advertising could be considered either an expense or a liability, depending on how it is classified.
1. If the payment was made in cash, it would decrease the company's cash (an asset) by $2,600. Assuming this was an expense, it would be recorded as a decrease in owner's equity.
Therefore, the accounting equation would be:
Assets = Cash
Liabilities = ?
Owner's Equity = ?
2. If the payment was made on credit, it would increase the company's accounts payable (a liability) by $2,600. This means the company owes the amount to its suppliers for advertising.
In this case, the accounting equation would be:
Assets = ?
Liabilities = Accounts Payable
Owner's Equity = ?
Without additional information, it is not possible to provide a complete answer. Please provide more details regarding whether the payment was made in cash or on credit, and if there are any other transactions that occurred.