The Accounting Equation: Assets, Liabilities, Equity, P/L
The accounting equation, a fundamental principle in accounting, establishes a relationship between four key entities: assets, liabilities, equity, and profits/losses. Assets represent the resources owned by a company, while liabilities are the debts it owes. Equity represents the residual interest in the assets after deducting liabilities, essentially the owner’s claim on the company’s assets. Profits … Read more