Is The Balance Sheet Represent The Accounting Equation

Yes, the Balance Sheet represents Basic or Fundamental Accounting Equation which shows the relationship between Assets, Liabilities and Equity. Whole Accounting Under Double Entry System revolves around this equation. This Accounting Equation is written as follows:

Assets = Liabilities + Owner’s Equity (Equity)

Here Assets are the resources acquired a business as a result of Liabilities (External Sources of Finance) and Owner’s Equity or Equity that are Internal Sources of Finance for a business.