# The accounting equation is assets liabilities plus what?

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## Top best answers to the question Â«The accounting equation is assets liabilities plus whatÂ»

The three elements of the accounting equation are assets, liabilities, and shareholders' equity. The formula is straightforward: A company's total assets are equal to its liabilities **plus its shareholders' equity**.

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The Accounting Equation: Assets = Liabilities + Equity Assets. Ever heard the phrase â€śTom is an asset to the companyâ€ť? The meaning is clear. Tom is a good worker that brings... Liabilities. Meet Michael. Tomâ€™s friend. Unlike Tom, Michael is a liability to the company. Being an inherently negative..â€¦

The basic formula of accounting equation formula is assets equal to liabilities plus ownerâ€™s equity. Assets are what the company owns. They include cash on hand, cash at banks, investment, inventory, accounts receivable, prepaid, advance, fixed assets, etc.

The accounting equation formula is: Assets = Liabilities + Ownersâ€™ or Stockholdersâ€™ Equity. This equation contains three of the five so called â€śaccounting elementsâ€ťâ€”assets, liabilities, equity.

The basic accounting equation. In the basic accounting equation, liabilities and equity equal the total amount of assets. The accounting formula is: Assets = Liabilities + Equity. Because you make purchases with debt or capital, both sides of the equation must equal. Equity has an equal effect on both sides of the equation.

Understanding the Accounting Equation Assets. Assets include cash and cash equivalents or liquid assets, which may include Treasury bills and certificates of... Liabilities. Liabilities are what a company typically owes or needs to pay to keep the company running. Debt, including... Shareholders' ...

The accounting equation is the logic behind the double-entry accounting system used on balance sheets, income statements, and cash flow statements. It states that all assets must equal all liabilities plus shareholder equity. What a firm owns and what a firm owes must always balance.

The expanded accounting equation for a sole proprietorship is: Assets = Liabilities + Owner's Capital + Revenues â€“ Expenses â€“ Owner's Draws. The expanded accounting equation for a corporation provides more details for the stockholders' equity amount shown in the basic accounting equation.

The most important equation in all of accounting. Letâ€™s take the equation we used above to calculate a companyâ€™s equity: Assets â€“ Liabilities = Equity. And turn it into the following: Assets = Liabilities + Equity. Accountants call this the accounting equation (also the â€śaccounting formula,â€ť or the â€śbalance sheet equationâ€ť).

Liabilities plus assets equal equity b. Equity minus liabilities equal assets c. Liabilities minus assets equal equity d. Assets minus liabilities equal equity; Question: Which of the following correctly states the â€śAccounting Equationâ€ť? Select one: a. Liabilities plus assets equal equity b. Equity minus liabilities equal assets c ...

In general, the expression Assets = Capital + Liabilities is termed as the Accounting Equation, but you can use any of the above relationships till the time you understand the fundamentals of the equation. Therefore, at any point, the total number of assets of a firm is equal to the total number of liabilities.