Archive | Accounting Equation

Basic Accounting Equation

The fundamental accounting equation is: This is basis of double entry book keeping as well. Income – Expense = Profit; when income is more than expenses the difference is termed as profit. Expense – Income = Loss; when income is less than expenses the difference is termed as loss. Both profit and loss are equity […]

Business Transactions and Accounting Equation

Read this article to learn about the affect of business transactions on the elements of accounting equation. Basically, there are three main variables or elements in any accounting equation viz. (i) Assets, (ii) Liabilities and (iii) Capital (Owner’s Equity). These three elements are shown in the accounting equation as: Assets = Liabilities + Capital It […]

Accounting Equation: Meaning and Concept (With Case Study)

Read this article to learn about the meaning and concept of accounting equation. Meaning of Accounting Equation: Accounting equation is a tool, with which equality of debits and credits can be ascertained. Accounting Equations are also known as Balance Sheet Equations since all the components of Balance Sheet are depicted in them. It has two […]

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