The accounting equation illustrates the relationship between a company's assets and the claims that creditors and investors have on those assets. The equation is the basic structure on which a company ...

Discover how accruals affect company finances, with insights into the accrual accounting method, its applications, and examples illustrating its principles.

The expanded accounting equation builds upon the basic accounting equation's use of assets, liabilities and equity by incorporating additional components such as revenues, expenses and withdrawals.

A bedrock principle of business bookkeeping is that the accounting equation must always balance: Your assets must always equal your liabilities plus your owner's equity. When your business becomes a ...