Finance and accounts

The basic idea of the accounting equation remains the same which states that a firm’s total assets will always be equal to the sum of total liabilities and shareholders’ equity. The expanded accounting equation breaks down the shareholders’ equity into further sub-items. Shareholders’ equity = Owners’ capital + Retained earnings Retained earnings will further be …

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The accounting equation is used in financial accounting, which defines the relationship between a firm’s assets, liabilities, and shareholders’ equity. As per the accounting equation, the relationship between these terms can be represented as follows: Assets = Liabilities + Shareholders’ equity It means that a firm’s total assets will always be equal to the sum …

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