Accounting Equation – Kinds of Accounts – Personal – Real - Nominal
This is the most important topic and the whole Accounting is based on this equation as all the financial statements follow this accounting equation and this accounting equation includes all the five types of accounts used in accounting. These Accounts are: ü Assets ü Liabilities ü Owner's Equity ü Income ü Expenses You may also be interested in " Expanded Accounting Equation " What Do You Mean By Accounting Equation? Accounting Equation or Basic Accounting Equation or Fundamental Accounting Equation or Accou nti ng Formula Sheet tells us that all the assets owned by the business are always equal to the sum of liabilities and Owner's Equity or i n other words it shows us the fu ndame ntal relatio nship exists betwee n Assets, Liabilities A nd Equity. Numerically, we can write Accou n ti ng Equatio n Formula as show n below : Assets = Liabilities + Owner's Eq