What is the basic accounting equation. These are the building blocks of the basic accounting equation. A Balancing Act Sometimes called the basic accounting equation the accounting equation is the foundation of double entry accounting a system where every financial transaction is entered into two places in the businesss booksas a debit and as a credit.
Assets Liabilities Shareholders Equity This equation sets the foundation of double-entry accounting and highlights the structure of the balance sheet.
The basic formula for the accounting equation is Assets Liabilities Owners equity. The accounting equation formula is. Asset liabilities equity is the basic accounting equation and the main element of the double-entry accounting system. The equation must always be kept in balance.