The accounting equation illustrates the relationship between a company's assets and the claims that creditors and investors have on those assets. The equation is the basic structure on which a company ...

Assets = Liabilities + Owner's Equity is the principal equation for accounting. Many business owners understand the importance of the words, but not what they mean. Throw in debits, credits, ledgers ...

The expanded accounting equation builds upon the basic accounting equation's use of assets, liabilities and equity by incorporating additional components such as revenues, expenses and withdrawals.