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| 1. |
What is the basic accounting equations? |
| Answer» Asset=liabilities+captial<br>The\xa0accounting equation\xa0is considered to be the foundation of the double-entry\xa0accounting\xa0system. The\xa0accounting equation\xa0shows on a company\'s balance sheet whereby the total of all the company\'s assets equals the sum of the company\'s liabilities and shareholders\' equity.\xa0The balance sheet is based on the fundamental equation: Assets = Liabilities +\xa0Equity. Image: CFI\'s Financial Analysis Course. As such, the balance sheet is divided into two sides (or sections). The left side of the balance sheet outlines all of a company\'s assets. | |