Accounting is perhaps one of the most useful subjects required in this modern world of investments and financial transactions. As any person would know, accounting is all about budgeting and managing money. Hence, needless to say it involves intricate mathematics and formulations.
It consists of several standard equations to be followed and can often be pretty complicated. One of these is the famous accounting equation which has troubled the best minds since long.
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The accounting equation comprises of balance sheet of a company and shows relationship between assets, liabilities, and the equity of owner in a business cycle. It is the important layout and most fundamental foundation in double entry book keeping in accountancy. Always remember that debit and credit should be equal and should match both the sides.
The basic equation goes that assets equal sum up of capital and liabilities. Now one may ask as to what is meant by capital in accountancy terms? Capital is the equity in the stockholder’s arena. The accounting principle says that accounting equation should maintain the balance that is the debit and the credit side should match well.
Mathematically, this accounting equation is given as:
A=L+E or a=oe+l where A and a are Assets, L and l are liabilities and E refer to equity and oe to stockholder equity. This will be an integral part of accounting equation homework help and accounting equation assignment help. You can easily avail all this on myhomeworkhelp.com.
Accounting equation homework help says that the equations should be applied with care and mentioning all the details. That means, it should be fundamental while done in double entry book keeping system. They are applied in:
The yearly or quarterly statements of any firm are concluded from the accounting equation of their bookkeeping system. This equation also helps in determination, analysis and forecasting of revenue and profit trends of a business. Hence, doubtlessly it has profound application all over the business world.
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It is the basic fundamental of accounts and applied mainly in business sector for double entry analysis, several financial analyses, balance sheet analysis etc. The basic elements of accounting equation are the main component of business and finance and they are:
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