Respuesta :
Accounts on the left side of the accounting equation (assets) are increased with a debt.
What is Accounting Equation?
The accounting equation demonstrates that the total assets of a corporation equal the sum of its obligations and shareholders' equity (assets = liabilities + equity). The basis of double-entry accounting is the distinct relationship between a company's liabilities, assets, and equity.
The relationship between an entity's assets, liabilities, and owner's equity is represented by the basic accounting equation, often known as the balance sheet equation. It serves as the system's cornerstone for double-entry bookkeeping. The total debits and total credit for each transaction are equal.
In the accounting equation, assets, liabilities, and equity make up the three components. These three components are all necessary to comprehend a company's financial situation.
The Debits and Credits Rules. Accounts are increased by debits and credits in several ways. An entry on the left side of the account represents an increase to the asset account on the left side of the equation (debit). Therefore, a credit is applied to their accounts.
Formula
A=L+E
A = assets
L = liabilities
E = equity
Hence, Accounts on the left side of the accounting equation (assets) are increased with a debt.
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