What is the fundamental accounting equation?
What is the fundamental accounting equation?
Assets = Liabilities + Equity
Assets - Liabilities = Equity
Liabilities = Assets + Equity
Equity = Assets - Liabilities
The fundamental accounting equation is:
Assets = Liabilities + Equity
This equation shows that a company's assets (what it owns) are equal to its liabilities (what it owes) plus its equity (ownership interest). This equation must always balance in order for a company's financial statements to be accurate.