Learn the Accounting Equation

What is the Accounting Equation?

The accounting equation is a formula in financial accounting. If accounts are kept correctly, then assets will always equal liabilities plus equity.

Accounting Equation for Sole Traders

Assets = Liabilities + Owners Equity

Accounting Equation for Corporations

Assets = Liabilities + Shareholders Equity

Learn more about the Accounting Equation by watching the above video. Alternatively watch our Accounting Equation video on YouTube - click here

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The information on this site cannot be relied on as accurate and up to date. We strongly advise you seek the advice of accounting and tax professionals before making any accounting related decisions.

Visit SM Accounting Ltd

This site contains free bookkeeping and accounting courses and is ideal for anyone looking to learn finance, bookkeeping or accounting. This site contains information on double-entry bookkeeping, basic accounting, credit control, business planning, etc. 

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