accounting equation

  

Definition

Assets = liabilities + owners' equity. The most fundamental equation of double-entry bookkeeping system, it expresses the relationship between what is owned and what is owed by an entity.

Use accounting equation in a sentence

  • Before I could run the business, my dad told me that I must figure out how to read an accounting equation.

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  • When you want to try and figure out what your net worth is you can use the accounting equation to figure it out.

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  • If you want to find out how much money you really are making you can use the accounting equation to find your bottom line.

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