Answer:
Accounting Equation
Explanation:
The accounting equation forms the basis of preparing a balance sheet and the double-entry accounting concept.
The accounting equation is presented as Assets = Liabilities + Shareholder’s Equity. The balance sheet presentation follows this concept. It is divided into three segments, assets, liabilities, and equity.
The double entry concepts will record entries affecting assets in the same manner. Those affecting liabilities and equity are recorded similarly. The entries of assets balance the entries of equity and liabilities.
