What is the fundamental accounting equation?

Question

What is the fundamental accounting equation?

Assets = Liabilities + Equity

Assets - Liabilities = Equity

Liabilities = Assets + Equity

Equity = Assets - Liabilities

Answer 1

The fundamental accounting equation is:

Assets = Liabilities + Equity

This equation shows that a company's assets (what it owns) are equal to its liabilities (what it owes) plus its equity (ownership interest). This equation must always balance in order for a company's financial statements to be accurate.