Accounting Dictionary - Letter A

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting equation
(also called basic accounting equation or balance sheet equation) is a rule under which assets equal liabilities plus equity (A = L + E). This rule holds true at all times because of the double entry accounting (bookkeeping) system. An increase (decrease) in total assets is always accompanied by an equal increase (decrease) in total liabilities and equity.
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