# Keyword Analysis & Research: accounting equation cheat sheet

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How to calculate accounting equation?

Formula 1: The Accounting Equation The accounting equation equates assets with liabilities and owners’ equity: Assets = Liability + Owners' Equity Assets are things owned by the company — such as cash, inventory, and equipment — that will provide some future benefit.

What is accounting equation?

What is the Accounting Equation? The accounting equation is the basic element of the balance sheet and the primary principle of accounting. It helps the company to prepare a balance sheet and see if the entire enterprise’s asset is equal to its liabilities and stockholder equity. It is the base of the double-entry accounting system.

How to solve accounting equations with examples?

Accounting Equation Formula – Example #1. Suppose you have just started a new of selling cupcakes. Now, you invested \$10,000 from your pocket. So that will be your equity investment and will become an asset for the company. So equation: Total Assets = Total Liabilities + Total Equity. \$10,000 = 0 + \$10,000.