Is It True That The Basic Accounting Equation Is A=L+P?


2 Answers

Ghazanfar Ali Profile
Ghazanfar Ali answered
The Basic Accounting Equation is A=L + C
A = Assets
L = Liability
C= Capital
Anonymous Profile
Anonymous answered
Yes it is always true that Asset = Liabilities + Capital

  1. The assets are all the things that you own. Has a debit balance.
  2. The liabilities are all the things that you owe. Has a credit balance.
  3. The capital is the net worth or your investment – mainly initial investment. Has a credit balance.
All the things which you own (mean assets) are financed either with the capital or with borrowed funds; therefore, assets = liabilities +  capital. Or in other words your debit balance should be equal to your  credit balance.

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