# Basic Accounting Equation?

## Answer

The accounting equation involves the liabilities, equity and assets of a business in order to determine how they are related. The formula insist that the net worth or equity of the business is determined by subtracting the value of the businesses' liability from then value of the businesses' assets. This basic accounting equation is used mostly on balance sheets, understanding the formula is important when you and using balance sheets in order to prevent any errors on the reports.
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What Is a Basic Accounting Equation?
The basic accounting equation helps us to determine the true state of a company's financial situation. This accounting equation is expressed as Assets = Liabilities + Owner's Equity.... More »
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Q&A Related to "Basic Accounting Equation?"
 The very basic accounting equation is assets - liabilities = net worth. There is more to it than that, but the end goal is to find net worth by adding up all assets and subtracting http://answers.ask.com/Business/Finance/what_is_th...
 A corporate balance sheet features the perennial accounting equation that requires that total assets be equal to total liabilities plus shareholders' equity. This relationship is http://www.ehow.com/info_8243323_basic-equations-a...
 1. Create a simple three-column accounting system with Assets, Liabilities and Equity. Assets are things of value to the organization. Some examples of assets are land, equipment, http://www.ehow.com/how_5188152_learn-basic-accoun...
 The expanded accounting equation replaces Owner's Equity in the basic accounting equation (Assets = Liabilities + Owner's Equity) with the following components: Owner's Capital + http://wiki.answers.com/Q/What_is_an_expanded_basi...
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The basic accounting equation is assets are equal to liabilities plus stockholder's equity. It is the foundation for the double entry bookkeeping system. It also ...
The very basic accounting equation is assets - liabilities = net worth. There is more to it than that, but the end goal is to find net worth by adding up all assets and subtracting out all liabilities. ...
It is good for anyone in business to have a knowledge of at least some basic accounting terms. This will help you to understand information that your accountant ...
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