Why Assets And Liabilities & Equity Are Equal In Balance Sheet
Because all assets acquired b y the b usi ness t hrough exter nal lia b ilities a nd internal liab ilities (Ow ner’s Equity or Equity) , accordi ng to Accounting Equation . Also due to dual aspect accounting concept of b usi ness transactions, t he total of de b its must b e equal to the total of credits i n a transaction under Doub le Entry Bookkeeping System . T he Dual Aspect Accou nting Concept stated t hat: “For Every Deb it, There Must Be A Credit With A n Equal Amount” If t he de b it side a n d credit side of a n account are not equalized or b ala nced wit h each other, the n accurate accounting information can not b e o b tai ned. So, Balancing of Accounts or Equalization of Accounts is necessary so t hat b ala nce s heet, whic h is also a represe ntation of an Accounting Equation , should b e tally o n specified time of a particular date during t he accou nting period.