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What does the Accounting Equation mean? The Accounting Equation is a formula that sets out the relationship between Assets, Liabilities & Equity. It says that at any given moment, a business's Assets must equal its Liabilities plus Equity. You could call this the backbone of bookkeeping because the accounting equation always has to balance. The concept at the heart of the Accounting Equation is very simple. The stuff that a business owns is equal to the stuff that a business owes. A business own
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How well do you know Assets, Liabilities & Equity? Try to classify these 5 accounts: 1. Is “Cash” an Asset, a Liability or an Equity account? 2. Is “Accounts Payable” an Asset, a Liability or an Equity account? 3. Is “Retained Earnings” an Asset, a Liability or an Equity account? 4. Is “Goodwill” an Asset, a Liability or an Equity account? 5. Is “Deferred Revenue” an Asset, a Liability or an Equity account? Let me know how you scored in the comments. #accounting #accountingstudent #accountingstu
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