أنشئ حسابًا أو سجّل الدخول للانضمام إلى مجتمعك المهني.
It’s a good question, which comes in mind of both Accounting & Non-Accounting people. To understand this, we need to understand that the basic aspect of accounting is based on ‘Double Entry System’ i.e. for every Debit there has to be a corresponding Credit.
The second step in the regard is the preparation of 'Trial Balance' whereby there is a double entry for each transactions - Total Debits = Total Credits.
In the third step comes the preparation of Profit & Loss A/c. In this statement after postings of transactions and balancing the statement, the remaining balance (either Profit or Loss) is transferred to the Balance Sheet.
In the Fourth Step, the balance items of Trial Balance & Profit & Loss A/c are recorded on the ‘Balance Sheet’ according to their status, i.e., either on the Assets side or on the Liabilities side. In the end the two sides (Assets & Liabilities) tallies. If there is any difference it is recorded under ‘Suspense A/c’ and posted on the side where the disparity is arising.
Thus it can be conclude that ‘Assets’ will always equal ‘Liabilities’ (including Equity)
Because it the nature of accounting & finance.
The reason is simple i.e. due to double entry system of book keeping/ accounting
Its basic double entry concept A= Liabilities +Owners equity
