What is the basic accounting equation?

Asset = capital + profit +liability _ drawing

The basic accounting equation is "Assets = liabilities + owners' equity." Assets are what the company owns.
liabilities are what the company owes to other parties.
Owners' equity is the owners' share in the company.

 

The expanded accounting equation is Assets = Liabilities + (Owner's Capital + Revenues - Expenses - Owner's Draws) for a sole proprietorship or Assets = Liabilities + (Paid-in Capital + Revenues - Expenses - Dividends - Treasury Stock) for a corporation. The equation expands the owner's or stockholders' equity component of the basic accounting formula, which is Assets = Liabilities + Owner's or Stockholders' Equity.

 

Double entry system of accounting is universally accepted.
Loca paciali innovated this system in the written form double entry system double aspects of each transaction are mentioned.
Two accounts are influenced for each transaction one is debit and the other is credit Modern writers of Accounting have innovated an arithmetical equation known as accounting equation on the basis of this dual aspect of transactions.
This equation is universally accepted.
The basis of this equation is that the total assets of an organization are equal to the total equity i.e.
asset equity.
This is a fundamental accounting equation.
Here, A = E A = Total Assets E = Total equity.
There fore, the main accounting Equation can be expressed in the Following extend Form Here, A = L + OE L = Claim or right o creditors OE = Owner’s equity.

Assets = Liabilities + Owner’s Equity

look at your Balance Sheet !

called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a business.
It is the foundation for the double-entry bookkeeping system.
For each transaction, the total debits equal the total credits.
It can be expressed as Assets = Liabilities + Capital a = l + c

Assets = Liabilities +capital

Assets= outsider Equity+owner Equity

Assets = Liabilities = Capital+ Profit/Loss- Drawing